Gain Therapeutics Inc

Previous wording

We are a biotechnology company developing novel small molecule therapeutics to treat diseases across several therapeutic areas, including, central nervous system (“CNS”) disorders, lysosomal storage disorders (“LSDs”), metabolic disorders, and other diseases that can be targeted through protein degradation, such as oncology. We use our computational target and drug discovery platform, Magellan™, to discover novel allosteric binding sites on proteins implicated in a disease and to identify proprietary small molecules that bind these sites to modulate protein function and treat the underlying cause of the disease. We believe that Magellan™ is uniquely suited to identify allosteric binding sites on the protein surface, which are different from the active (or orthosteric) binding site where the natural ligand of the protein binds. Targeting an allosteric binding site instead of the active binding site of a protein provides numerous advantages, including: the ability to regulate proteins implicated in disease through several different mechanisms of action covering both functional and conformational effects, including stabilization, destabilization, targeted degradation, allosteric inhibition, and allosteric activation of the targeted protein; improved specificity of small molecules because binding to an allosteric binding site is non-competitive with the natural substrate that binds to the active binding site; and the ability to identify small molecules with more favorable drug-like properties. The Magellan™ drug discovery platform is an evolution of its predecessor SEE-Tx®, or Site-Directed Enzyme Enhancement Therapy. Magellan™ integrates and adds to the foundational models of SEE-Tx® with proprietary AI and machine learning tools that enable the screening of over 50 billion compounds. Discovering and targeting novel allosteric sites with our platform not only reduces traditional drug discovery timelines but enables rational drug design and offers the potential for superior small molecule drugs that are highly specific and that can penetrate hard to reach tissues and cross the blood-brain barrier. We have used the Magellan™ drug discovery platform to identify novel allosteric sites and small molecules for all of our pipeline programs. We plan to continue to advance our existing research programs and initiate additional programs targeting allosteric binding sites identified with the Magellan™ platform in various therapeutic areas through academic partnerships, co-development and licensing arrangements.

Current wording

We are a biotechnology company developing novel small molecule therapeutics to treat diseases across several therapeutic areas, including, central nervous system (“CNS”) disorders, lysosomal storage disorders (“LSDs”) and metabolic disorders through molecular chaperoning to stabilize misfolded proteins and increase their activity, as well as other diseases that can be targeted through protein inactivation or modulation, such as oncology. We use our computational target and drug discovery platform, Magellan™, to discover novel allosteric binding sites on proteins implicated in a disease and to identify proprietary small molecules that bind these sites to modulate protein function and treat the underlying cause of the disease. We believe that Magellan™ is uniquely suited to identify allosteric binding sites on the protein surface, which are different from the active (or orthosteric) binding site where the natural ligand of the protein binds. Targeting an allosteric binding site instead of the active binding site of a protein provides numerous advantages, including: the ability to regulate proteins implicated in disease through several different mechanisms of action covering both functional and conformational effects, including stabilization, destabilization, targeted degradation, allosteric inhibition, and allosteric activation of the targeted protein; improved specificity of small molecules because binding to an allosteric binding site is non-competitive with the natural substrate that binds to the active binding site; and the ability to identify small molecules with more favorable drug-like properties. The Magellan™ drug discovery platform is an evolution of its predecessor SEE-Tx®, or Site-Directed Enzyme Enhancement Therapy. Magellan™ integrates and adds to the foundational models of SEE-Tx® with proprietary AI and machine learning tools that enable the screening of trillions of compounds. Discovering and targeting novel allosteric sites with our platform not only reduces traditional drug discovery timelines but enables rational drug design and offers the potential for superior small molecule drugs that are highly specific and that can penetrate hard to reach tissues and cross the blood-brain barrier. We have used our drug discovery platform to identify novel allosteric sites and small molecules for all of our pipeline programs. We plan to continue to advance our existing research programs and initiate additional programs targeting allosteric binding sites identified with the Magellan™ platform in various therapeutic areas through academic partnerships, co-development and licensing arrangements.

Previous wording

Our clinical stage product candidate, GT-02287, is being developed for the treatment of GBA1 Parkinson’s disease. We have generated an extensive preclinical data package providing evidence of the mechanism of action and safety of GT-02287. In preclinical models of GBA1 Parkinson’s disease, GT-02287 has been shown to restore glucocerebrosidase, or GCase, function in the lysosome, reduce toxic lipid substrates and toxic forms of alpha-synuclein, improve survival of dopaminergic neurons, increase dopamine levels, completely restore locomotor function, and reduce plasma-based neurodegeneration maker, neurofilament light chain, or NfL, back to the level of healthy animals. In early clinical studies GT-02287 was generally well tolerated up to and including the highest planned dose level for further study in GBA1 Parkinson’s patients, with no serious adverse events. The good safety and tolerability profile and the observed range of plasma exposure levels achieved after oral administration further bolster GT-02287’s best in-class potential.

Current wording

Our clinical stage product candidate, GT-02287, is being developed for the treatment of Parkinson’s disease with and without GBA1 mutations. We have generated an extensive preclinical data package providing evidence of the mechanism of action, in vivo pharmacology, and safety of GT-02287. In preclinical models of GBA1 Parkinson’s disease, GT-02287 has been shown to restore glucocerebrosidase, or GCase, function in the lysosome, reduce toxic lipid substrates and toxic forms of alpha-synuclein, improve survival of dopaminergic neurons, increase dopamine levels, restore locomotor and cognitive function, and reduce plasma-based neurodegeneration maker, neurofilament light chain (NfL), back to the level of control animals. In a Phase 1 first-in-human study, GT-02287 was safe and generally well tolerated up to and including the highest planned dose level, enabling further development in GBA1 Parkinson’s patients. The good safety and tolerability profile and the observed range of plasma exposure levels achieved after oral administration further bolster GT-02287’s best in-class potential.

Previous wording

We continue to monitor the impacts on our operations and access to financing of global and worsening macroeconomic conditions, such as the war in Ukraine, the Hamas-Israel conflict, global geopolitical tension, heightened

Current wording

We continue to monitor the impacts on our operations and access to financing of global and worsening macroeconomic conditions, such as the war in Ukraine, the Hamas-Israel conflict, global geopolitical tension, heightened inflation, exchange rate fluctuations, supply chain disruptions, liquidity concerns and increases in commodity, energy and fuel prices.

Previous wording

In May 2022, we filed a shelf registration statement on Form S-3, which covers the offering, issuance and sale of up to a maximum aggregate offering of $100.0 million of any combination of our common stock, preferred stock, debt securities and/or warrants from time to time in one or more offerings. In connection with the ATM Program, we entered into a Controlled Equity OfferingSM Sales Agreement, or Sales Agreement, with Cantor Fitzgerald & Co., or Cantor, pursuant to which we were able to offer and sell shares of our common stock having an aggregate offering of up to $16.0 million from time to time through or to Cantor, acting as our agent or principal, in a series of one or more at-the-market equity offerings, which we refer to as our ATM Program. During the year ended December 31, 2023, we sold an aggregate of 862,535 shares of common stock at a weighted average average price of $4.60 per share, raising gross proceeds of $3.9 million, which includes $0.4 million in sales and commissions and other offering expenses. The Sales Agreement and the

Current wording

In May 2022, we filed a shelf registration statement on Form S-3, which covers the offering, issuance and sale of up to a maximum aggregate offering of $100.0 million of any combination of our common stock, preferred stock, debt securities and/or warrants from time to time in one or more offerings. In connection with the ATM Program, we entered into a Controlled Equity Offering SM Sales Agreement, or Sales Agreement, with Cantor Fitzgerald & Co., or Cantor, pursuant to which we were able to offer and sell shares of our common stock having an aggregate offering of up to $16.0 million from time to time through or to Cantor, acting as our agent or principal, in a series of one or more at-the-market equity offerings, which we refer to as our ATM Program. During the year ended December 31, 2023, we sold an aggregate of 862,535 shares of common stock at a weighted average price of $4.60 per share, raising gross proceeds of $3.9 million, which includes $0.4 million in sales and commissions and other offering expenses. The Sales Agreement and the ATM Program were terminated in conjunction with the public offering and concurrent private placement of shares of the Company’s common stock in November 2023, as described below.

Previous wording

From inception through March 31, 2024, we have raised an aggregate of $74 million of gross proceeds through equity financings, including the issuance of convertible preferred stock, our IPO and previous sales under our ATM Program.

Current wording

From inception through June 30, 2024, we have raised an aggregate of $85 million of gross proceeds through equity financings, including the issuance of convertible preferred stock, our IPO and previous sales under our ATM Program.

Previous wording

As of March 31, 2024, we had cash, cash equivalents and marketable securities of $12.7 million. We have incurred recurring losses and negative cash flows from operations since inception and as of March 31, 2024 and December 31, 2023, had an accumulated deficit of $64.8 million and $60.8 million, respectively. We anticipate incurring additional losses until such time, if ever, that we can generate sales of our product candidates currently in development. We have not generated any product revenues and have not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, we will need significant additional financing to fund our operations and to develop our product candidates. Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our pipeline, management may need to curtail our development efforts and planned operations to conserve cash.

Current wording

As of June 30, 2024, we had cash and cash equivalents of $16.9 million. We have incurred recurring losses and negative cash flows from operations since inception and as of June 30, 2024 and December 31, 2023, had an accumulated deficit of $72.9 million and $60.8 million, respectively. We anticipate incurring additional losses until such time, if ever, that we can generate sales of our product candidates currently in development. We have not generated any product revenues and have not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, we will need significant additional financing to fund our operations and to develop our product candidates. Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our pipeline, management may need to curtail our development efforts and planned operations to conserve cash.

Previous wording

As of March 31, 2024, and December 31, 2023, we had an accumulated deficit of $64.8 million and $60.8 million, respectively, and as of March 31, 2024, we had cash, cash equivalents and marketable securities of $12.7 million. During the three months ended March 31, 2024, we incurred net losses of $4 million and generated negative cash flows from operations of $3.6 million. Our current operating plan indicates that we will continue to incur losses from operations and generate negative cash flows from operating activities. Our projected cash outflows for the upcoming periods raise substantial doubt about our ability to continue as a going concern for at least 12 months from the issuance of the financial statements included elsewhere in this Quarterly Report on Form 10-Q. We will need to raise additional capital to fund continued operations beyond the first quarter of 2025. We plan to address our liquidity needs by taking steps to improve our operations and cash position, including identifying access to future capital and potential cost-reduction measures.

Current wording

June 30, 2024, we incurred net losses of $12.2 million and generated negative cash flows from operations of $9.3 million. Our current operating plan indicates that we will continue to incur losses from operations and generate negative cash flows from operating activities. Our projected cash outflows for the upcoming periods raise substantial doubt about our ability to continue as a going concern for at least 12 months from the issuance of the financial statements included elsewhere in this Quarterly Report on Form 10-Q. We will need to raise additional capital to fund continued operations beyond the second quarter of 2025. We plan to address our liquidity needs by taking steps to improve our operations and cash position, including identifying access to future capital and potential cost-reduction measures.

Previous wording

In connection with our business development activities, we enter into collaboration and licensing arrangements with third parties, to use our licensed Magellan™ computational platform technology to discover novel allosteric sites on proteins and identify proprietary small molecules that bind these sites and may be developed into pharmaceutical products. We expect to continue to identify and evaluate collaboration, co-development and licensing opportunities that may be similar to or different from the collaboration and licenses arrangements that we have entered into.

Current wording

In connection with our business development activities, we are looking to enter into collaboration and licensing arrangements with third parties, to use our licensed Magellan™ computational platform technology to discover novel allosteric sites on proteins and identify proprietary small molecules that bind these sites and may be developed into pharmaceutical products. We expect to continue to identify and evaluate collaboration, co-development and licensing opportunities that may be similar to or different from the collaboration and licenses arrangements that we have entered into.

Previous wording

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will continue to increase in the foreseeable future as we (i) increase personnel costs, including stock-based compensation, (ii) continue preclinical development of our lead compounds, (iii) progress our clinical trials for certain product candidates, (iv) continue to discover and develop additional product candidates, and (v) pursue later stages of clinical development of product candidates.

Current wording

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will continue to increase in the foreseeable future as we (i) increase personnel costs, including stock-based compensation, (ii) continue preclinical development of our lead compounds, (iii) progress our clinical trials

Previous wording

General and administrative expenses consist primarily of salaries, bonus and other related costs, including share-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters, professional

Current wording

General and administrative expenses consist primarily of salaries, bonus and other related costs, including share-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel expenses, and facility-related expenses, and other operating costs.

Previous wording

We will continue to focus on preserving our liquidity resources while we seek to maximize shareholders’ value. We expect to continue the efforts started during the year ended December 31, 2023 to limit general and administrative expenses.

Current wording

We will continue to focus on preserving our liquidity resources while we seek to maximize shareholders’ value.

Previous wording

The following table summarizes our results of operations for the three months ended March 31, 2024 and 2023.

Current wording

The following table summarizes our results of operations for the three and six months ended June 30, 2024 and 2023.

Previous wording

Research and development expenses decreased by $0.3 million to $2.5 million for the three months ended March 31, 2024, as compared to $2.8 million for the three months ended March 31, 2023. The decrease in research and development expenses was primarily due to $204 thousand in grant funding that was recognized in the statement of operations during the first quarter of 2024. Substantially all research and development expenses are related to costs associated with the ongoing preclinical and Clinical Phase 1 development of GT-02287 in GBA1 Parkinson’s Disease.

Current wording

Research and development expenses increased by $0.4 million to $4.4 million for the three months ended June 30, 2024, as compared to $4.0 million for the three months ended June 30, 2023. The increase in research and development expenses was primarily related to costs associated with the ongoing Clinical Phase 1 trial of our lead program GT-02287 for the treatment of Parkinson’s Disease.

Previous wording

General and administrative expenses decreased by $0.6 million to $1.9 million for the three months ended March 31, 2024, as compared to $2.5 million for the three months ended March 31, 2023. The decrease in general and administrative expenses for the period was primarily attributable to a decrease in legal and professional fees relating to general corporate matters and a decrease in share-based compensation expenses.

Current wording

General and administrative expenses decreased by $0.6 million to $5.6 million for the six months ended June 30, 2024, as compared to $6.2 million for the six months ended June 30, 2023. The decrease in general and administrative expenses for the period was primarily attributable to a decrease in legal and professional fees relating to general corporate matters and a decrease in share-based compensation expenses.

Previous wording

Foreign exchange loss, net increased by $0.3 million to $0.27 million for the period ended March 31, 2024, from negative $43 thousand for the period ended March 31, 2023. The increase is mainly attributable to the forex exchange dynamics between the Swiss Franc and the US dollar.

Current wording

Foreign exchange gain, net increased by $0.3 million to $0.2 million for the six months period ended June 30, 2024, from negative $0.1 million for the six months period ended June 30, 2023. The increase is mainly attributable to the forex exchange dynamics between the Swiss Franc and the US dollar.

Previous wording

As of March 31, 2024, and December 31, 2023, we had $12.7 million and $16.8 million in cash and cash equivalents and marketable securities, respectively, and an accumulated deficit of $64.8 million and $60.8 million, respectively. We had indebtedness of $0.5 million and $0.6 million as of March 31, 2024, and December 31, 2023, respectively. Our cash and cash equivalents available as of March 31, 2024, are expected to be sufficient to fund our anticipated operating and capital requirements into the first quarter of 2025 and will not be sufficient to finance the Company’s operations for one year from the issuance of the financial statements included in this Quarterly Report Form 10-Q. Therefore, we have reported that there is substantial doubt about our ability to continue as a going concern. Please refer to the discussion above titled “Going Concern”.

Current wording

As of June 30, 2024, and December 31, 2023, we had $16.9 million and $16.8 million in cash and cash equivalents and marketable securities, respectively, and an accumulated deficit of $72.9 million and $60.8 million, respectively. We had indebtedness of $0.5 million and $0.6 million as of June 30, 2024, and December 31, 2023, respectively. Our cash and cash equivalents available as of June 30, 2024, are expected to be sufficient to fund our anticipated operating and capital requirements into the second quarter of 2025 and will not be sufficient to finance the Company’s operations for one year from the issuance of the financial statements included in this Quarterly Report Form 10-Q. Therefore, we have reported

Previous wording

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. We may not be able to obtain additional funds through equity or debt financings when needed on favorable terms or at all, including as a result of rising interest rates, liquidity concerns at, and failures of, banks and other financial institutions, volatility in the capital markets and related market uncertainty. Further, if we are unable to obtain additional funding to support our current or proposed activities and operations, we may not be able to

Current wording

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. We may not be able to obtain additional funds through equity or debt financings when needed on favorable terms or at all, including as a result of rising interest rates, liquidity concerns at, and failures of, banks and other financial institutions, volatility in the capital markets and related market uncertainty. Further, if we are unable to obtain additional funding to support our current or proposed activities and operations, we may not be able to continue our operations as currently anticipated, which may require us to suspend or terminate any ongoing development activities, modify our business plan, curtail various aspects of our operations, cease operations, or seek relief under applicable bankruptcy laws.

Previous wording

During the three months ended March 31, 2024 and 2023, we used $3.6 million and $4.2 million of cash, respectively, in operating activities, primarily to fund our operations related to the development of our pipeline and product candidates as well as related general and administrative support activities.

Current wording

During the six months ended June 30, 2024 and 2023, we used $9.3 million and $9.2 million of cash, respectively, in operating activities, primarily to fund our operations related to the development of our pipeline and product candidates as well as related general and administrative support activities.

Previous wording

During the three months ended March 31, 2024, net cash provided by investing activities was $3 million primarily due to maturity of marketable securities.

Current wording

During the six months ended June 30, 2024, net cash provided by investing activities was $5.0 million, primarily due to maturity of marketable securities.

Previous wording

During the three months ended March 31, 2023, net cash provided by investing activities was $2.1 million primarily due to maturity of marketable securities for $4.1 million partially offset by the purchase of marketable securities for $2.0 million.

Current wording

During the six months ended June 30, 2023, net cash provided by investing activities was $5.1 million, primarily due to maturity of marketable securities for $7.1 million partially offset by the purchase of marketable securities for $2.0 million.

Previous wording

During the three months ended March 31, 2024, cash used in financing activities was $0.15 million mainly related to the following: $0.1 million provided by the exercise of public warrants and, $0.06 million provided by the exercise of stock options offset by negative $0.28 million of offering costs that have been paid in the first quarter of 2024.

Current wording

During the six months ended June 30, 2024, cash provided by financing activities was $9.9 million mainly related to the following: $10.0 million provided by net proceeds from issuance of shares and warrants in public offering, $0.1 million provided by the exercise of public warrants, partially offset by negative $0.2 million of deferred offering costs that have been paid in the first quarter of 2024.

Previous wording

During the three months ended March 31, 2023, cash provided by financing activities was approximately $0.7 million mainly related to the ATM Program.

Current wording

During the six months ended June 30, 2023, cash provided by financing activities was $2.9 million, mainly related to the ATM Program.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses,

Current wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, defined benefit pension liability, share-based compensation and recognition of research grants. Our actual results may differ from these estimates under different assumptions or conditions. During the six months ended June 30, 2024, there were no material changes to our critical accounting policies. For additional information, see Item 8 of Part II, “Financial Statements and Supplementary Data — Note 2 — Summary of Significant Accounting Policies” of our Annual Report and Item 1 of Part I, “Financial Statements — Note 2 — Summary of Significant Accounting Policies,” of this Quarterly Report. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.

Previous wording

We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenue of $1.07 billion or more, (ii) December 31, 2026, (iii) the date on which we have issued more than $1.0 billion of non-convertible debt instruments during the previous three fiscal years or (iv) the date on which we are deemed a “large accelerated filer” under the rules of the SEC with at least $700 million of outstanding equity securities held by non-affiliates.

Current wording

We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenue of $1.07 billion or more, (ii) December 31, 2026, (iii) the date on which we have issued more than $1.0 billion of non-convertible debt instruments during the previous three fiscal years or (iv) the date on which