Kiniksa Pharmaceuticals International plc

Previous wording

ARCALYST is an interleukin-1α and interleukin-1β cytokine trap. In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear. We received FDA approval of ARCALYST for thetreatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older in March 2021. Recurrent pericarditis is a painful inflammatory cardiovascular disease with an estimated United States prevalent population of approximately 40,000 patients seeking and receiving medical treatment. ARCALYST is commercially available across the United States through a network of distributors. ARCALYST is also approved in the United States for the treatment of Cryopyrin-Associated Periodic Syndromes (“CAPS”), including Familial Cold Autoinflammatory Syndrome (“FCAS”) and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in Deficiency of Interleukin-1 Receptor Antagonist (“DIRA”) in adults and children weighing 10 kg or more. We are responsible for sales and distribution of ARCALYST in all approved indications in the United States, and evenly split profits on sales, as well as third party proceeds, with Regeneron.

Current wording

ARCALYST is an interleukin-1α and interleukin-1β cytokine trap. In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear. We received FDA approval of ARCALYST for thetreatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older in March 2021. Recurrent pericarditis is a painful inflammatory cardiovascular disease with an estimated United States prevalent population of approximately 40,000 patients seeking and receiving medical treatment. ARCALYST is commercially available across the United States through a select network of specialty pharmacies. ARCALYST is also approved in the United States for the treatment of Cryopyrin-Associated Periodic Syndromes (“CAPS”), including Familial Cold Autoinflammatory Syndrome (“FCAS”) and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in Deficiency of Interleukin-1 Receptor Antagonist (“DIRA”) in adults and children weighing 10 kg or more. We are responsible for sales and distribution of ARCALYST in all approved indications in the United States, and evenly split profits on sales, as well as third party proceeds, with Regeneron.

Previous wording

Abiprubart is an investigational monoclonal antibody inhibitor of CD40-CD154 costimulatory interaction. In 2019, we acquired all of the outstanding securities of Primatope Therapeutics, Inc. (“Primatope”), the company that owned or controlled the intellectual property related to abiprubart. In connection with our acquisition of Primatope, we acquired an exclusive world-wide license to abiprubart from Beth Israel Deaconess Medical Center, Inc. (“BIDMC”). The CD40-CD154 interaction is a key T-cell co-stimulatory signal critical for B-cell maturation, immunoglobulin class switching and Type 1 immune response. We believe disrupting the CD40-CD154 costimulatory interaction is an attractive approach to address multiple autoimmune disease pathologies. In December 2021, we initiated a Phase 2 clinical trial of abiprubart inrheumatoid arthritis (“RA”), which is designed to evaluate pharmacokinetics, safety and efficacy with subcutaneous administration. In January 2024, we announced topline clinical data from Cohorts 1, 2 and 3 of the trial and that the trial met its primary efficacy endpoint in Cohort 3 at the weekly dose level. In April 2024, we announced (a) topline clinical data from Cohort 4 of the RA trial and (b)our plan to initiate a Phase 2b clinical trial of abiprubart in Sjögren’s Disease in the second half of 2024.

Current wording

Abiprubart is an investigational monoclonal antibody inhibitor of CD40-CD154 costimulatory interaction. In 2019, we acquired all of the outstanding securities of Primatope Therapeutics, Inc. (“Primatope”), the company that owned or controlled the intellectual property related to abiprubart. In connection with our acquisition of Primatope, we acquired an exclusive world-wide license to abiprubart from Beth Israel Deaconess Medical Center, Inc. (“BIDMC”). The CD40-CD154 interaction is a key T-cell co-stimulatory signal critical for B-cell maturation, immunoglobulin class switching and Type 1 immune response. We believe disrupting the CD40-CD154 costimulatory interaction is an attractive approach to address multiple autoimmune disease pathologies. In December 2021, we initiated a Phase 2 clinical trial of abiprubart inrheumatoid arthritis (“RA”), which is designed to evaluate pharmacokinetics, safety and efficacy with subcutaneous administration. In January 2024, we announced topline clinical data from Cohorts 1, 2 and 3 of the trial and that the trial met its primary efficacy endpoint in Cohort 3 at the weekly dose level. In April 2024, we announced (a) topline clinical data from Cohort 4 of the RA trial and (b)our plan to initiate a Phase 2b clinical trial of abiprubart in Sjögren’s Disease in the second half of 2024. In July 2024, we announced that we had commenced enrollment in such trial.

Previous wording

In March 2024, we announced our plans for the Redomiciliation, which, if carried out, would result in the change of place of incorporation of our principal holding company from Bermuda to the UK. The Redomiciliation

Current wording

On June 27, 2024, we announced the completion of the change of place of incorporation of our principal holding company from Bermuda to the United Kingdom (the “Redomiciliation”), pursuant to a scheme of arrangement approved by both the Bermuda Supreme Court and our shareholders. As used herein, and unless the context otherwise requires, references to “we”, “us”, “our” and similar words or phrases prior to the Redomiciliation shall refer to Kiniksa Pharmaceuticals, Ltd. and from and after the Redomiciliation, to Kiniksa Pharmaceuticals International, plc.

Previous wording

Our ability to generate product revenue sufficient to sustain our organization will depend heavily on a number of factors, including the continued commercialization of ARCALYST, the development and eventual commercialization of one or more of our current or future product candidates, if approved, and the management of our costs consistent with our current operating plan. For the three months ended March 31, 2024, our net loss was $17.7 million. As of March 31, 2024, we had an accumulated deficit of $495.7 million.

Current wording

Our ability to generate product revenue sufficient to sustain our organization will depend heavily on a number of factors, including the continued commercialization of ARCALYST, the development and eventual commercialization of one or more of our current or future product candidates, if approved, and the management of our costs consistent with our current operating plan. For the three and six months ended June 30, 2024, our net loss was $3.9 million and $21.6 million, respectively. As of June 30, 2024, we had an accumulated deficit of $499.6 million.

Previous wording

As of March 31, 2024, we had cash, cash equivalents and short-term investments of $213.6 million. We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of theunaudited consolidated financial statements included in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.” Our future viability is dependent on our ability to fund our operations through sales of ARCALYST and/or raise additional capital, such as through debt or equity offerings, as needed.

Current wording

As of June 30, 2024, we had cash, cash equivalents and short-term investments of $218.8 million. We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of theunaudited consolidated financial statements included in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.” Our future viability is dependent on our ability to fund our operations through sales of ARCALYST and/or raise additional capital, such as through debt or equity offerings, as needed.

Previous wording

Under the Genentech License Agreement, we received an upfront payment of $80.0 million for the license. Additionally, in 2023, we received a total of $35.0 million in additional payments from Genentech related to delivery of certain drug material to Genentech and Genentech’s achievement of a development milestone. In the fourth quarter of 2023, following the achievement of a development milestone related to a second indication under the Genentech License Agreement, Genentech became obligated to make an additional cash payment of $10.0 million, which was received in the first quarter of 2024. We will be eligible to receive up to a total of approximately $600.0 million in contingent payments, including specified development, regulatory and sales-based milestones, of which approximately $575.0 million remains as of March 31, 2024. We will also be eligible to receive tiered percentage royalties on a Genentech Licensed Product-by-Genentech Licensed Product basis ranging from low-double digits to mid-teens on annual net sales of each Genentech Licensed Product, subject to certain customary reductions, with an aggregate minimum floor, before fulfilling our upstream financial obligations. Royalties will be payable on a Genentech Licensed Product-by-Genentech Licensed Product and country-by-country basis until the latest to occur of the expiration of certain patents that cover a Genentech Licensed Product, the expiration of regulatory exclusivity for such Genentech Licensed Product, or the tenth anniversary of first commercial sale of such Genentech Licensed Product in such country. We have recognized $124.8 million of revenue of the $125.0 million transaction price under the Genentech License Agreement and will recognize the remaining revenue over the remaining duration of the in-progress Phase 2b clinical trial of vixarelimab in prurigo nodularis.

Current wording

Under the Genentech License Agreement, we received an upfront payment of $80.0 million for the license. Additionally, in 2023, we received a total of $35.0 million in additional payments from Genentech related to delivery of certain drug material to Genentech and Genentech’s achievement of a development milestone. In the fourth quarter of 2023, following the achievement of a development milestone related to a second indication under the Genentech License Agreement, Genentech became obligated to make an additional cash payment of $10.0 million, which was received in the first quarter of 2024. In the second quarter of 2024, we received $5.0 million following the achievement of a development milestone related to a third indication under the Genentech License Agreement. We will be eligible to receive up to a total of approximately $600.0 million in contingent payments, including specified development, regulatory and sales-based milestones, of which approximately $570.0 million remains as of June 30, 2024. We will also be eligible to receive tiered percentage royalties on a Genentech Licensed Product-by-Genentech Licensed Product basis ranging from low-double digits to mid-teens on annual net sales of each Genentech Licensed Product, subject to certain customary reductions, with an aggregate minimum floor, before fulfilling our upstream financial obligations. Royalties will be payable on a Genentech Licensed Product-by-Genentech Licensed Product and country-by-country basis until the latest to occur of the expiration of certain patents that cover a Genentech Licensed Product, the expiration of regulatory exclusivity for such Genentech Licensed Product, or the tenth anniversary of first commercial sale of such Genentech Licensed Product in such country. As of June 30, 2024, we have recognized the $130.0 million received from Genentech under the Genentech License Agreement as revenue.

Previous wording

transfer of ARCALYST drug substance manufacturing initiated by Regeneron in March 2023, to the extent permitted by the Regeneron Agreement, the fully-burdened costs of each of us and Regeneron incurred in performing such technology transfer shall also be deducted from net sales of ARCALYST to determine profit. We also evenly split with Regeneron any proceeds received by us from any licensees, sublicensees and distributors in consideration for the sale, license or other disposition of rights with respect to ARCALYST, including upfront payments, milestone payments and royalties.

Current wording

transfer of ARCALYST drug substance manufacturing from Regeneron to Samsung, to the extent permitted by the Regeneron Agreement, the fully-burdened costs of each of us and Regeneron incurred in performing such technology transfer shall also be deducted from net sales of ARCALYST to determine profit. We also evenly split with Regeneron any proceeds received by us from any licensees, sublicensees and distributors in consideration for the sale, license or other disposition of rights with respect to ARCALYST, including upfront payments, milestone payments and royalties.

Previous wording

We have been commercializing ARCALYST since April 2021 and expect that our selling, general and administrative expenses will continue to increase in the future.

Current wording

We expect that our selling, general and administrative expenses will continue to increase in the future.

Previous wording

Kiniksa Bermuda is an exempted company incorporated under the laws of Bermuda, we are principally subject to taxation in Bermuda. Under the current laws of Bermuda, there is no corporate income tax levied on an exempted company’s income, resulting in an effective zero percent tax rate. As a result, we have not recorded any income tax benefits from our losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards are currently available to us for those losses. In December 2023, Bermuda passed legislation enacting a corporate income tax effective in 2025 on companies that meet certain requirements. If we meet those requirements, we could become subject to taxation in Bermuda in the future. Our wholly owned United States subsidiaries, Kiniksa US, and Primatope are subject to federal and state income taxes in the United States. Our wholly owned subsidiary Kiniksa UK, its Swiss branch office, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Pharmaceuticals (Germany) GmbH, Kiniksa Pharmaceuticals (France) SARL, and Kiniksa Pharmaceuticals, GmbH (“Kiniksa Switzerland”) are subject to taxation in their respective countries.

Current wording

Prior to the Redomiciliation, our principal holding company was incorporated and principally subject to taxation in Bermuda. Following the Redomiciliation, our principal holding company is incorporated and principally subject to taxation in the United Kingdom. Under the current laws of Bermuda, there is no corporate income tax levied on an exempted company’s income, resulting in an effective zero percent tax rate. As a result, we have not recorded any income tax benefits from our losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards are currently available to us for those losses. Our wholly owned United States subsidiaries, Kiniksa US, and Primatope are subject to federal and state income taxes in the United States. Our wholly owned subsidiary Kiniksa UK, its Swiss branch office, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Pharmaceuticals (Germany) GmbH, Kiniksa Pharmaceuticals (France) SARL, and Kiniksa Pharmaceuticals, GmbH (“Kiniksa Switzerland”) are subject to taxation in their respective countries.

Previous wording

We recognized net revenue from the sale of ARCALYST of $78.9 million for the three months ended March 31, 2024, compared to $42.7 million for the three months ended March 31, 2023, an increase of $36.2 million. The increase in product revenue was primarily driven by an increase in patients.

Current wording

We recognized net revenue from the sale of ARCALYST of $103.4 million for the three months ended June 30, 2024, compared to $54.5 million for the three months ended June 30, 2023, an increase of $48.9 million. The increase in product revenue was primarily driven by an increase in patients.

Previous wording

We recognized cost of goods sold of $10.6 million for the three months ended March 31, 2024, compared to $7.0 million for the three months ended March 31, 2023, an increase of $3.5 million. The increase in cost of goods sold relates primarily to the increase in sales of ARCALYST and $2.1 million related to the technology transfer of the manufacturing process offset by a decrease in average cost per unit resulting from favorable production variances.

Current wording

We recognized cost of goods sold of $12.3 million for the three months ended June 30, 2024, compared to $7.7 million for the three months ended June 30, 2023, an increase of $4.6 million. The increase in cost of goods sold relates primarily to the increase in sales of ARCALYST and $2.8 million related to the technology transfer of the manufacturing process, offset by a decrease in average cost per unit resulting from favorable production variances.

Previous wording

Collaboration expenses were $20.8 million for the three months ended March 31, 2024, compared to $8.3 million for the three months ended March 31, 2023, an increase of $12.5 million. Collaboration expenses increased due to increased revenue from sales of ARCALYST and improved profitability under the Regeneron Agreement.

Current wording

Collaboration expenses were $30.0 million for the three months ended June 30, 2024, compared to $14.0 million for the three months ended June 30, 2023, an increase of $16.0 million. Collaboration expenses increased due to increased revenue from sales of ARCALYST and improved profitability under the Regeneron Agreement.

Previous wording

The direct costs for our abiprubart program were $15.1 million during the three months ended March 31, 2024, compared to $3.4 million during the three months ended March 31, 2023, an increase of $11.6 million. The increase in expenses incurred primarily related to the manufacturing of clinical material, continuation of cohort four of our Phase 2 trial in RA and start-up costs of our Phase 2b clinical trial in Sjögren’s Disease during the three months ended March 31, 2024, as compared to initiation cost of cohort three and continuation of the first two cohorts of our Phase 2 trial in RA incurred during the three months ended March 31, 2023.

Current wording

The direct costs for our abiprubart program were $12.4 million during the three months ended June 30, 2024, compared to $11.6 million during the three months ended June 30, 2023, an increase of $0.7 million. The increase in expenses incurred primarily related to the manufacturing of clinical material, continuation of cohort four of our Phase 2 trial in RA and start-up costs of our Phase 2b clinical trial in Sjögren’s Disease during the three months ended June 30, 2024, as compared to the manufacturing of clinical material, initiation cost of cohort three and continuation of the first two cohorts of our Phase 2 trial in RA incurred during the three months ended June 30, 2023.

Previous wording

The direct costs for our vixarelimab program were $0.8 million during the three months ended March 31, 2024, compared to $2.0 million during the three months ended March 31, 2023, a decrease of $1.3 million. The decrease in expenses was primarily related to the wind-down activities of our Phase 2b clinical trial in prurigo nodularis.

Current wording

The direct costs for our vixarelimab program were $0.3 million during the three months ended June 30, 2024, compared to $2.3 million during the three months ended June 30, 2023, a decrease of $2.0 million. The decrease in expenses was primarily related to the wind-down activities of our Phase 2b clinical trial in prurigo nodularis.

Previous wording

Unallocated research and development expenses were $10.2 million for the three months ended March 31, 2024, compared to $9.4 million for the three months ended March 31, 2023, an increase of $0.8 million. The increase of $0.8 million in unallocated research and development expenses was primarily due to an increase in preclinical development activities. Personnel-related costs for the three months ended March 31, 2024 and 2023 included share-based compensation of $1.5 million and $1.4 million, respectively.

Current wording

Unallocated research and development expenses were $10.6 million for the three months ended June 30, 2024, compared to $9.1 million for the three months ended June 30, 2023, an increase of $1.5 million. The increase of $1.5 million in unallocated research and development expenses was primarily due to an increase in early development activities. Personnel-related costs for the three months ended June 30, 2024 and 2023 included share-based compensation of $1.5 million and $1.4 million, respectively.

Previous wording

Selling, general and administrative expenses were $38.7 million for the three months ended March 31, 2024, compared to $29.0 million for the three months ended March 31, 2023. In 2023, we expanded our ARCALYST salesforce to help drive further prescriber adoption and patient enrollments. The increase of $9.6 million was primarily due to an increase of $6.0 million in personnel-related costs and an increase in sales and marketing of $1.5 million largely attributable to the expansion of our salesforce. Personnel-related costs for the three months ended March 31, 2024 and 2023 included share-based compensation of $5.4 million and $4.4 million, respectively.

Current wording

Selling, general and administrative expenses were $42.4 million for the three months ended June 30, 2024, compared to $29.2 million for the three months ended June 30, 2023. In the second half of 2023, we expanded our ARCALYST salesforce to help drive further prescriber adoption and patient enrollments. The increase of $13.2 million was primarily due to an increase of $5.6 million in personnel-related costs, an increase in sales and marketing of $4.4 million largely attributable to the expansion of our salesforce and an increase in professional fees of $1.5 million largely attributable to the Redomiciliation. Personnel-related costs for the three months ended June 30, 2024 and 2023 included share-based compensation of $5.5 million and $4.8 million, respectively.

Previous wording

Other income was $2.3 million for the three months ended March 31, 2024 compared to $1.8 million for the three months ended March 31, 2023. The increase of $0.4 million was primarily due to higher interest rates on U.S. Treasury notes.

Current wording

Other income was $2.4 million for the three months ended June 30, 2024 compared to $1.9 million for the three months ended June 30, 2023. The increase of $0.5 million was primarily due to higher interest rates on U.S. Treasury notes.

Previous wording

For the three months ended March 31, 2024, we recorded an income tax provision of $3.4 million relating primarily to income earned in the UK, Switzerland and the U.S., net of the Foreign Derived Intangible Income (“FDII”) deduction and U.S. federal and state research and development credits (“R&D Credits”) utilized. For the three months ended March 31, 2023, we recorded an income tax provision of $2.9 million relating primarily to income earned in the UK and the U.S., net of the FDII deduction and R&D Credits utilized. We expect that our reported income tax expense for future periods will be higher due to the utilization of our deferred tax assets.

Current wording

For the three months ended June 30, 2024, we recorded an income tax provision of $6.2 million relating primarily to income earned in the United Kingdom, Switzerland and the U.S., net of the Foreign Derived Intangible Income (“FDII”) deduction and U.S. federal and state research and development credits (“R&D Credits”) utilized. For the three months ended June 30, 2023, we recorded an income tax benefit of $16.2 million relating primarily to the release of the valuation allowance on our U.S. deferred tax assets offset by income earned in the United Kingdom and the U.S., net of the Foreign Derived Intangible Income (“FDII”) deduction and U.S. federal and state research and development credits (“R&D Credits”) utilized. We expect that our reported income tax expense for future periods will be higher due to the utilization of our deferred tax assets.

Previous wording

We reported $1.0 million of license and collaboration revenue for the three months ended March 31, 2024, related primarily to $0.7 million of products sold under the Rilonacept Huadong Collaboration Agreements, $0.2 million of deferred revenue recognized related to the delivery of such materials and $0.1 of deferred revenue under the Genentech License Agreement. In the prior year period, we reported $5.7 million of revenue primarily related to the delivery of certain materials under the Genentech License Agreement.

Current wording

We reported $6.2 million of license and collaboration revenue for the six months ended June 30, 2024, primarily driven by the achievement of a $5.0 million development milestone related to a third indication under the Genentech License Agreement, $0.7 million of products sold under the Rilonacept Huadong Collaboration Agreements, and $0.2 million of deferred revenue recognized related to the delivery of such materials. We reported $22.7 million of

Previous wording

As of March 31, 2024, our principal source of liquidity was cash, cash equivalents and short-term investments, which totaled $213.6 million. Net loss was $17.7 million and $12.3 million for the three months ended March 31, 2024 and 2023, respectively. We expect to incur operating losses for the foreseeable future.

Current wording

As of June 30, 2024, our principal source of liquidity was cash, cash equivalents and short-term investments, which totaled $218.8 million. Net income (loss) was ($3.9) million and $2.7 million for the six months ended June 30, 2024 and 2023, respectively. We expect to incur operating losses for the foreseeable future.

Previous wording

Under various agreements with third parties, we have agreed to make milestone payments, pay royalties, pay annual maintenance fees and to meet due diligence requirements, each based upon specified events. Pursuant to the Regeneron Agreement, we have entered into a supply agreement with Regeneron to purchase both clinical and commercial product. We have committed to minimum payments to Regeneron of $27.1 million, all of which are due within one year. We have entered into lease agreements for office and laboratory space, and vehicles, with total future lease payments of $14.0 million, of which $3.0 million are due within one year. In connection with our ongoing technology transfer of ARCALYST drug substance manufacturing, we have entered into a manufacturing commitment with a CDMO to establish a new manufacturing site for ARCALYST drug substance. Such commitment, which includes the purchase of raw materials and related service fees, will obligate us to minimum payments of $94.2 million, $17.3 million of which are due within one year. We have additionally entered into agreements with several CDMOs to provide the Company with preclinical and clinical trial materials for our non-ARCALYST assets, which obligate us to minimum payments of $26.7 million, $11.7 million of which are due within one year.

Current wording

Under various agreements with third parties, we have agreed to make milestone payments, pay royalties, pay annual maintenance fees and to meet due diligence requirements, each based upon specified events. Pursuant to the Regeneron Agreement, we have entered into a supply agreement with Regeneron to purchase both clinical and commercial product. We have committed to minimum payments to Regeneron of $20.3 million, all of which are due within one year. We have entered into lease agreements for office and laboratory space, and vehicles, with total future lease payments of $14.1 million, of which $3.8 million are due within one year. In connection with our ongoing technology transfer of ARCALYST drug substance manufacturing, we have entered into a Master Services Agreement and a Product Specific Agreement with Samsung. Our commitments under such agreements, which include the purchase of raw materials and related service fees, will obligate us to minimum payments of $144.7 million, $15.8 million of which are due within one year. We have additionally entered into agreements with several CDMOs to provide the Company with preclinical and clinical trial materials for our non-ARCALYST assets, which obligate us to minimum payments of $15.7 million, $7.2 million of which are due within one year.

Previous wording

Under various agreements with third parties, we are entitled to receive upfront payments, milestone payments, and royalties, each based upon specified milestones. In the first quarter of 2024, following Genentech’s achievement of a development milestone in the fourth quarter of 2023 related to a second indication under the Genentech License Agreement, we received $10.0 million.

Current wording

Under various agreements with third parties, we are entitled to receive upfront payments, milestone payments, and royalties, each based upon specified milestones. In the first quarter of 2024, following Genentech’s achievement of a development milestone in the fourth quarter of 2023 related to a second indication under the Genentech License Agreement, we received $10.0 million. In the second quarter of 2024, following Genentech’s achievement of a development milestone related to a third indication under the Genentech License Agreement, we received $5.0 million.

Previous wording

Net cash provided by operations was $4.0 million for the three months ended March 31, 2024, compared to net cash used in operating activities of $4.3 million for the three months ended March 31, 2023. The increase in cash provided by operating activities is primarily due to an increase in net contribution from higher ARCALYST sales, offset by a decrease in cash received from licensing agreements of $10.0 million.

Current wording

Net cash provided by operations was $9.2 million for the six months ended June 30, 2024, compared to net cash used in operating activities of $8.0 million for the six months ended June 30, 2023. The increase in cash provided by operating activities is primarily due to an increase in net contribution from higher ARCALYST sales, offset by a decrease in cash received from licensing agreements of $5.0 million.

Previous wording

Net cash provided by investing activities was $25.5 million for the three months ended March 31, 2024, compared to net cash used in investing activities of $37.9 million for the three months ended March 31, 2023. The increase in net cash provided by investing activities was driven by managing our cash and short-term investments portfolio mix.

Current wording

Net cash used in investing activities was $21.3 million for the six months ended June 30, 2024, compared to net cash used in investing activities of $2.4 million for the six months ended June 30, 2023. The increase in net cash used in investing activities was driven by managing our cash and short-term investments portfolio mix.

Previous wording

During the three months ended March 31, 2024 and 2023, net cash provided by financing activities was $3.6 million and $0.1 million, respectively, consisting of proceeds from the exercise of share options offset by payments in connection with Common Stock tendered for employee tax obligations.

Current wording

During the six months ended June 30, 2024 and 2023, net cash provided by financing activities was $3.4 million and $0.2 million, respectively, consisting of proceeds from the exercise of share options offset by payments in connection with Common Stock tendered for employee tax obligations.

Previous wording

We expect to incur significant expenses in connection with our ongoing and planned activities as we continue to commercialize ARCALYST and advance our current and future product candidates through preclinical and clinical development, seek regulatory approval and commercialize one or more of our current or future product candidates, if approved. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates. As a result, we expect to incur additional expenses related to milestone, royalty and other payments payable to third parties with whom we have entered into license, acquisition and other similar agreements to acquire the rights to our product candidates. Additionally, we expect to continue to incur costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses. We expect to incur expenses as we:

Current wording

We expect to incur significant expenses in connection with our ongoing and planned activities as we continue to commercialize ARCALYST and advance our current and future product candidates through preclinical and clinical development, seek regulatory approval and commercialize one or more of our current or future product candidates, if approved. We may also incur expenses in connection with collaboration, licensing or other strategic transactions. Further, we may incur expenses related to milestone, royalty and other payments payable to third parties with whom we have entered into license, acquisition and other similar agreements to acquire the rights to our product candidates. We expect to incur expenses as we:

Previous wording

●conduct new and ongoing research and pre-clinical and clinical development of our product candidates, including our Phase 2 clinical trial of abiprubart in RA and our planned Phase 2b clinical trial of abiprubart in Sjögren’s Disease;

Current wording

●conduct new and ongoing research and pre-clinical and clinical development of our product candidates, including our Phase 2 clinical trial of abiprubart in RA and our Phase 2b clinical trial of abiprubart in Sjögren’s Disease;

Previous wording

We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. The future viability of our company is dependent on our ability to fund our operations through sales of ARCALYST and/or raise additional capital, such as through debt or equity offerings, as needed. We anticipate that we may require additional capital if we choose to pursue in-licenses or acquisitions of other product candidates and technologies or their related businesses. We expect to continue to incur significant expenses related to product manufacturing, including technology transfer costs, sales, marketing and distribution of ARCALYST. In addition, if we obtain regulatory approval for any of our current or future product candidates, pursue additional indications or additional territories for our products or any of our current or future product candidates, we expect to incur significant expenses related to product development and manufacturing, sales, marketing and distribution, depending on where we choose to commercialize.

Current wording

We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. The future viability of our company is dependent on our ability to fund our operations through sales of ARCALYST and/or raise additional capital, such as through debt or equity offerings, as needed. We anticipate that we may require additional capital if we choose to pursue collaboration, licensing or other strategic transactions. We expect to continue to incur significant expenses related to product manufacturing, including technology transfer costs, sales, marketing and distribution of ARCALYST. In addition, if we obtain regulatory approval for any of our current or future product candidates, pursue additional indications or additional territories for our products or any of our current or future product candidates, we expect to incur significant expenses related to product development and manufacturing, sales, marketing and distribution, depending on where we choose to commercialize.

Previous wording

Until such time, if ever, as we can generate substantial and sustained product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, or other sources, including, licensing, collaboration, marketing, distribution or other strategic transactions or arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders’ ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect our shareholders’ rights as a common shareholder. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, debt financing would result in fixed payment obligations.

Current wording

In addition to product revenue, we may also finance our cash needs through a combination of public or private equity offerings, debt financings, or other sources, including, licensing, collaboration, marketing, distribution or other strategic transactions or arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders’ ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect our shareholders’ rights as a ordinary shareholder. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, debt financing would result in fixed payment obligations.

Previous wording

If we raise funds through licensing, collaboration, marketing, distribution or other strategic transactions or arrangements with third parties, we may have to relinquish valuable rights to our technologies, product candidates or future revenue streams, or otherwise agree to terms that may not be favorable to us. If we are unable to obtain funding, we could be forced to delay, reduce or eliminate some or all of our research and development programs for product candidates, product portfolio expansion or commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

Current wording

If we raise funds through licensing, collaboration, marketing, distribution or other strategic transactions or arrangements with third parties, we may have to relinquish valuable rights to our technologies, product candidates or future revenue streams, or otherwise agree to terms that may not be favorable to us. If we are unable to obtain funding,