Viridian Therapeutics IncDE

Previous wording

We are a biopharmaceutical company focused on discovering and developing potential best-in-class medicines for serious and rare diseases. We target disease areas where marketed therapies often leave room for improvements in efficacy, safety, and/or dosing convenience. We believe that first-generation medicines rarely represent optimal solutions, especially in rare disease areas, and that there is potential to develop differentiated, best-in-class medicines that could lead to improved patient outcomes, reduced side effects, improved quality of life, expanded market access, and augmented market competition. Our business model is designed to identify and evaluate product opportunities in disease areas where trial data establishes proof-of-concept for a drug target in the clinic, but the competitive evolution of the product life cycle management and number of entrants appears incomplete. We intend to prioritize indications where a fast-follower and a potentially differentiated drug candidate, or overall product profile, could create significant medical benefit for patients. We are engineering medicines to address unmet medical needs for patients and further advance drug innovation.

Current wording

We are a biopharmaceutical company focused on discovering, developing and commercializing potential best-in-class medicines for serious and rare diseases. We target disease areas where marketed therapies often leave room for improvements in efficacy, safety, and/or dosing convenience. We believe that first-generation medicines rarely represent optimal solutions, especially in rare disease areas, and that there is potential to develop differentiated, best-in-class medicines that could lead to improved patient outcomes, reduced side effects, improved quality of life, expanded market access, and augmented market competition. Our business model is designed to identify and evaluate product opportunities in disease areas where trial data establishes proof-of-concept for a drug target in the clinic, but the competitive evolution of the product life cycle management and number of entrants appears incomplete. We intend to prioritize indications where a fast-follower and a potentially differentiated drug candidate, or overall product profile, could create significant medical benefit for patients. We are engineering product candidates to address unmet medical needs for patients and further advance drug innovation.

Previous wording

We are developing two product candidates, VRDN-001 for intravenous and VRDN-003 for subcutaneous administration, to treat patients who suffer from TED. Our most advanced program, VRDN-001, is a differentiated humanized monoclonal antibody targeting IGF-1R intravenously administered for the treatment of TED. In previously presentedin vitro preclinical data, we showed that VRDN-001 is a potentially differentiated full antagonist of IGF-1R, compared to teprotumumab’s incomplete antagonism of IGF-1R. We also conducted phase 1/2 clinical trials of VRDN-001 in patients with active or chronic TED. In the active TED portion of the phase 1/2 clinical trials, data reported from all three dose cohorts of VRDN-001 (n=21) showed significant and rapid improvement in both the signs and symptoms of TED after two infusions of VRDN-001 compared to placebo. Across all VRDN-001 treated patients in the active TED trial, 71% were proptosis responders, 67% were overall responders, 62% achieved a CAS of 0 or 1, and 54% had complete resolution of their diplopia. In the chronic TED portion of the phase 1/2 clinical trials, data reported from both dose cohorts of VRDN-001 (n=12) showed significant and rapid improvement in the signs and symptoms of TED after two infusions of VRDN-001 compared to placebo. Across all VRDN-001 treated patients in the chronic TED trial, 42% were proptosis responders, 40% achieved a CAS of 0 or 1, and no patients had complete resolution of their diplopia. In the phase 1/2 clinical trials of both active and chronic TED, VRDN-001 had a favorable safety profile and was well-tolerated by all patients treated in all dose cohorts.

Current wording

We are developing two product candidates, veligrotug (formerly known as VRDN-001) for intravenous and VRDN-003 for subcutaneous administration, to treat patients who suffer from TED. Our most advanced program, veligrotug, is a differentiated humanized monoclonal antibody targeting IGF-1R intravenously administered for the treatment of TED. In previously presentedin vitro preclinical data, we showed that veligrotug is a potentially differentiated full antagonist of IGF-1R, compared to teprotumumab’s incomplete antagonism of IGF-1R. We also conducted phase 1/2 clinical trials of veligrotug in patients with active or chronic TED. In the active TED portion of the phase 1/2 clinical trials, data reported from all three dose cohorts of veligrotug (n=21) showed significant and rapid improvement in both the signs and symptoms of TED after two infusions of veligrotug compared to placebo. Across all veligrotug treated patients in the active TED trial, 71% were proptosis responders, 67% were overall responders, 62% achieved a CAS of 0 or 1, and 54% had complete resolution of their diplopia. In the chronic TED portion of the phase 1/2 clinical trials, data reported from both dose cohorts of veligrotug (n=12) showed significant and rapid improvement in the signs and symptoms of TED after two infusions of veligrotug compared to placebo. Across all veligrotug treated patients in the chronic TED trial, 42% were proptosis responders, 40% achieved a CAS of 0 or 1, and no patients had complete resolution of their diplopia. In the phase 1/2 clinical trials of both active and chronic TED, veligrotug had a favorable safety profile and was well-tolerated by all patients treated in all dose cohorts.

Previous wording

We are conducting a global pivotal program for VRDN-001, including evaluating its efficacy and safety in two global well-controlled phase 3 clinical trials, THRIVE and THRIVE-2, for the treatment of active and chronic TED, respectively. THRIVE and THRIVE-2 are each designed to compare a five-dose IV treatment arm of VRDN-001 at 10 mg/kg, dosed three weeks apart, to placebo. This five-dose VRDN-001 regimen features fewer infusions and a shorter time per infusion compared to teprotumumab, the currently marketed IGF-1R inhibitor. We expect to report topline THRIVE and THRIVE-2 data in September 2024 and by year end 2024, respectively. In addition, to meet the 300 patient standard safety database requirements for the VRDN-001 BLA, we are actively enrolling patients into our STRIVE clinical trial. STRIVE is a global study of VRDN-001 in TED patients that utilizes broad inclusion criteria (e.g., any severity or duration of disease) and is randomized 3:1 (10 mg/kg IV with an active control of 3 mg/kg IV). We are also enrolling patients in the open label extension study for non-responding patients in THRIVE and THRIVE-2. We anticipate filing a BLA for VRDN-001 in the second half of 2025.

Current wording

We are conducting a global pivotal program for veligrotug, including evaluating its efficacy and safety in two global well-controlled phase 3 clinical trials, THRIVE and THRIVE-2, for the treatment of active and chronic TED, respectively. On September 10, 2024, we announced topline data from the THRIVE study, which enrolled 113 patients, randomized to veligrotug (n=75) and placebo (n=38). THRIVE achieved all primary and secondary endpoints with a high level of statistical significance (p < 0.0001) and was generally well-tolerated, with no treatment-related SAEs. Veligrotug additionally showed a rapid onset of action, with the majority (53%) of veligrotug-treated patients achieving a proptosis response after just one infusion, or three weeks after start of therapy. We completed enrollment of THRIVE-2 in July 2024, and expect to announce topline data for this study by the end of 2024. THRIVE and THRIVE-2 are each designed to compare a five-dose IV treatment arm of veligrotug at 10 mg/kg, dosed three weeks apart, to placebo. This five-dose veligrotug regimen features fewer infusions and a shorter time per infusion compared to teprotumumab, the currently marketed IGF-1R inhibitor. In addition, to meet the 300 patient standard safety database requirements for the veligrotug biologics license application (“BLA”), we are actively enrolling patients into our STRIVE clinical trial. STRIVE is a global study of veligrotug in TED patients that utilizes broad inclusion criteria (e.g., any severity or duration of disease) and is randomized 3:1 (10 mg/kg IV with an active control of 3 mg/kg IV). We are also enrolling patients in the open label extension study for non-responding patients in THRIVE and THRIVE-2. We anticipate filing a BLA for veligrotug in the second half of 2025.

Previous wording

In addition to our VRDN-001 IV program, in December 2023 we selected VRDN-003 as our subcutaneous product candidate for pivotal development in TED following positive data in a phase 1 clinical trial in healthy volunteers. We believe VRDN-003 has the potential to be the best-in-class subcutaneous anti-IGF-1R product candidate by preserving the efficacy of anti-IGF-1Rs in TED, improving safety, and maximizing convenience for patients. VRDN-003 has the same binding domain as, VRDN-001, and was engineered to have a longer half-life. VRDN-003 is designed to be a low-volume, self-administered, infrequently dosed subcutaneous IGF-1R for TED, which we plan to launch commercially with an auto-injector.

Current wording

In addition to our veligrotug IV program, in December 2023 we selected VRDN-003 as our subcutaneous product candidate for pivotal development in TED following positive data in a phase 1 clinical trial in healthy volunteers. We believe VRDN-003 has the potential to be the best-in-class subcutaneous anti-IGF-1R product candidate by preserving the efficacy of anti-IGF-1Rs in TED, improving safety, and maximizing convenience for patients. VRDN-003 has the same binding domain as veligrotug, and was engineered to have a longer half- life. VRDN-003 is designed to be a low-volume, self-administered, infrequently dosed subcutaneous IGF-1R for TED, which we plan to launch commercially with an auto-injector.

Previous wording

The VRDN-003 phase 1 clinical study showed VRDN-003 to have a prolonged half-life of 40 to 50 days, which is four to five times that of VRDN-001. Because of the healthy volunteer data and the similarities between the VRDN-001 and VRDN-003 antibodies, we expect VRDN-003 to have similar clinical responses at the exposure levels of VRDN-001 that led to robust clinical activity in its phase 2 clinical trial in TED. Further, pharmacokinetic modeling of VRDN-003 based on the healthy volunteer data predicted that exposure levels of VRDN-003 could be achieved that are equivalent to exposure levels of VRDN-001 that produced clinically meaningful results with multiple dosing regimens of VRDN-003, i.e., subcutaneous injection every two, four, or eight weeks. We are advancing our VRDN-003 program, including initiating two planned global phase 3 clinical trials, REVEAL-1 and REVEAL-2, to evaluate the efficacy and safety of VRDN-003 in patients with active and chronic TED. We also anticipate that the program will include a safety study to complete a 300 patient standard safety database (to include patients from the REVEAL-1 and REVEAL-2 trials), and we expect that it will also include the required development to have an auto-injector device available at the time of commercial launch, if approved. We anticipate topline data for REVEAL-1 and REVEAL-2 in the first half of 2026, and we anticipate submitting a BLA for VRDN-003 by the end of 2026.

Current wording

The VRDN-003 phase 1 clinical study showed VRDN-003 to have a prolonged half-life of 40 to 50 days, which is four to five times that of veligrotug. Because of the healthy volunteer data and the similarities between the veligrotug and VRDN-003 antibodies, we expect VRDN-003 to have similar clinical responses at the exposure levels of veligrotug that led to robust clinical activity in its clinical trials to date in TED. Further, pharmacokinetic modeling of VRDN-003 based on the healthy volunteer data predicted that exposure levels of VRDN-003 could be achieved that are equivalent to exposure levels of veligrotug that produced clinically meaningful results with multiple dosing regimens of VRDN-003, i.e., subcutaneous injection every two, four, or eight weeks. We are advancing our VRDN-003 program, including the initiation of two global phase 3 clinical trials for VRDN-003 in August 2024: REVEAL-1 and REVEAL-2 in active and chronic TED, respectively. Both studies will evaluate subcutaneous VRDN-003 administered every four weeks or every eight weeks and will assess outcomes versus placebo. We also anticipate that the program will include a safety study to complete a 300 patient standard safety database (to include patients from the REVEAL-1 and REVEAL-2 trials), and we expect that it will also include the required development to have an auto-injector device available at the time of commercial launch, if approved. We anticipate topline data for REVEAL-1 and REVEAL-2 in the first half of 2026, and we anticipate submitting a BLA for VRDN-003 for the treatment of TED by the end of 2026.

Previous wording

VRDN-006 is a FcRn-targeting Fc fragment, and in non-human primate studies, demonstrated specificity for blocking FcRn-IgG interactions while not showing decreases in albumin or increases in LDL levels, which are known potential side effects associated with certain full-length anti-FcRn monoclonal antibodies. In our head-to-head non-human primate studies, VRDN-006 demonstrated comparable potency and IgG reductions to Vyvgart® (efgartigimod), the current standard of care in FcRn inhibition, as well as a similar safety profile. We plan to file an IND for VRDN-006 by the end of 2024 and expect healthy volunteer data for VRDN-006 in the second half of 2025. VRDN-008 is a novel, potential first-in-class FcRn inhibitor that aims to pair IgG suppression with extended half-life technology, potentially enabling deeper and more durable suppression of IgG than existing anti-FcRn therapies. Both molecules are designed to be convenient, self-administered, subcutaneous products.

Current wording

VRDN-006 is a FcRn-targeting Fc fragment, and in non-human primate studies, demonstrated specificity for blocking FcRn-IgG interactions while not showing decreases in albumin or increases in LDL levels, which are known potential side effects associated with certain full-length anti-FcRn monoclonal antibodies. In our head-to-head non-human primate studies, VRDN-006 demonstrated comparable potency and IgG reductions to efgartigimod, which is the current standard of care in FcRn inhibition, as well as a similar safety profile. We plan to file an IND for VRDN-006 by the end of 2024 and expect healthy volunteer data for VRDN-006 in the second half of 2025. VRDN-008 is a novel, potential first-in-class FcRn inhibitor that aims to pair IgG suppression with extended half-life technology, potentially enabling deeper and more durable suppression of IgG than existing anti-FcRn therapies. Both molecules are designed to be convenient, self-administered, subcutaneous products.

Previous wording

There were no changes to our critical accounting policies as disclosed in our 2023 Annual Report on Form 10-K during the six months ended June 30, 2024. Our significant accounting policies are disclosed in Note 2. Summary of Significant Accounting Policies to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Current wording

There were no changes to our critical accounting policies as disclosed in our 2023 Annual Report on Form 10-K during the nine months ended September 30, 2024. Our significant accounting policies are disclosed in Note 2. Summary of Significant Accounting Policies to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Previous wording

Research and development expenses were $56.2 million during the three months ended June 30, 2024, compared to $40.1 million during the three months ended June 30, 2023. The $16.1 million increase in research and development expenses is primarily attributable to the following:

Current wording

Research and development expenses were $69.2 million during the three months ended September 30, 2024, compared to $30.4 million during the three months ended September 30, 2023. The $38.8 million increase in research and development expenses is primarily attributable to the following:

Previous wording

•$11.7 million increase in clinical trial costs mainly due to expenses associated with our ongoing THRIVE and THRIVE-2 clinical trials;

Current wording

•$17.4 million increase in clinical trial costs mainly due to expenses associated with our ongoing THRIVE and THRIVE-2 clinical trials;

Previous wording

These increases were partially offset by a $5.0 million decrease in milestone, license and option fees due to the upfront payment for an exclusive license and collaboration agreement during the three months ended June 30, 2023.

Current wording

•$3.3 million increase in milestone, license and option fees due to the $4.0 million upfront payment to Paragon for an exclusive license agreement during the three months ended September 30, 2024;

Previous wording

•$2.3 million increase in personnel related costs, due primarily to increased share-based compensation and other employee compensation and recruiting costs; and

Current wording

•$2.9 million increase in personnel related costs, due primarily to increased headcount to support our ongoing research and development efforts, including share-based compensation and other employee compensation and recruiting costs.

Previous wording

General and administrative expenses were $16.1 million during the three months ended June 30, 2024, compared to $19.3 million during the three months ended June 30, 2023. The $3.2 million decrease in general and administrative expenses is primarily attributable to a $2.8 million decrease in personnel-related costs, primarily due to decreased share-based compensation expense.

Current wording

General and administrative expenses were $14.4 million during the three months ended September 30, 2024, compared to $20.9 million during the three months ended September 30, 2023. The $6.5 million decrease in general and administrative expenses is primarily attributable to a $7.1 million decrease in personnel-related costs, primarily due to a decrease in headcount and a decrease in share-based compensation and other employee compensation and recruiting costs. This decrease is partially offset by a $0.7 million increase in market research and other professional services fees.

Previous wording

Other income, net was $7.2 million during the three months ended June 30, 2024 compared to $4.2 million during the three months ended June 30, 2023. Other income, net for the three months ended June 30, 2024 is comprised of $7.7 million of interest income earned on short-term investments as well as$0.1 million of sub-lease income, offset by $0.6 million in interest expense related to our Hercules Loan and Security Agreement (as defined below). Other income, net for the three months ended June 30, 2023 is comprised of $4.3 million of interest income earned on short-term investments as well as $0.1 million of sub-lease income, offset by $0.2 million in interest expense related to our Hercules Loan and Security Agreement. The increase in interest income, as compared to prior year, is primarily attributable to higher average short-term investment balances during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Current wording

Other income, net was $6.8 million during the three months ended September 30, 2024 compared to $3.6 million during the three months ended September 30, 2023. Other income, net for the three months ended September 30, 2024 is comprised of $7.5 million of interest income earned on short-term investments, $0.2 million gain on investment as well as$0.1 million of sub-lease income, offset by $0.5 million in interest expense related to our Hercules Loan and Security Agreement and $0.4 million loss on disposal of equipment. Other income, net for the three months ended September 30, 2023 is comprised of $4.1 million of interest income earned on short-term investments as well as $0.1 million of sub-lease income, partially offset by $0.4 million in interest expense related to our Hercules Loan and Security Agreement and a $0.2 million loss on debt extinguishment related to the Hercules Amendment. The increase in interest income, as compared to prior year, is primarily attributable to higher average short-term investment balances during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Previous wording

Revenue for both the six months ended June 30, 2024 and 2023 was attributable to our collaboration agreement with Zenas BioPharma. The $26.0 thousand decrease in revenue is due to the timing of activities performed under the collaboration agreement.

Current wording

Revenue for both the nine months ended September 30, 2024 and 2023 was attributable to our collaboration agreement with Zenas BioPharma.

Previous wording

Research and development expenses were $97.1 million during the six months ended June 30, 2024, compared to $90.8 million during the six months ended June 30, 2023. The $6.3 million increase in research and development expenses is primarily attributable to the following:

Current wording

Research and development expenses were $166.3 million during the nine months ended September 30, 2024, compared to $121.2 million during the nine months ended September 30, 2023. The $45.1 million increase in research and development expenses is primarily attributable to the following:

Previous wording

•$20.2 million increase in clinical trial costs mainly due to expenses associated with our ongoing THRIVE and THRIVE-2 clinical trials;

Current wording

•$37.6 million increase in clinical trial costs mainly due to expenses associated with our ongoing THRIVE and THRIVE-2 clinical trials;

Previous wording

•$4.5 million increase in severance costs primarily related to separation agreements with former executive officers, including a $3.2 million increase in share-based compensation related to the acceleration of stock option vesting during the six months ended June 30, 2024; and

Current wording

•$4.2 million increase in severance costs primarily related to separation agreements with former executive officers, including a $3.2 million increase in share-based compensation related to the acceleration of stock option vesting during the nine months ended September 30, 2024;

Previous wording

•$4.9 million increase in personnel related costs, due primarily to increased share-based compensation and other employee compensation and recruiting costs.

Current wording

•$8.1 million increase in personnel related costs, due primarily to increase in headcount to support our ongoing research and development efforts, including increased share-based compensation and other employee compensation and recruiting costs;

Previous wording

•$2.8 million increase in preclinical research costs to advance our FcRn inhibitor portfolio;

Current wording

•$0.9 million increase in preclinical research costs to advance our FcRn inhibitor portfolio.

Previous wording

•$20.0 million decrease in milestone, license and option fees due to the $15.0 million upfront payment for development of subcutaneous delivery systems and a $5.0 million upfront payment for an exclusive license and collaboration agreement incurred during the six months ended June 30, 2023; and

Current wording

These increases are partially offset by a $16.7 million decrease in milestone, license and option fees as a result of the $15.0 million upfront payment for development of subcutaneous delivery systems and the $5.7 million upfront payment for an exclusive license and collaboration agreement incurred during the nine months ended September 30, 2023, offset by the $4.0 million upfront payment to Paragon for an exclusive license agreement during the nine months ended September 30, 2024.

Previous wording

General and administrative expenses were $31.1 million during the six months ended June 30, 2024, compared to $41.1 million during the six months ended June 30, 2023. The $10.0 million decrease in general and administrative expenses is primarily attributable to the following:

Current wording

General and administrative expenses were $45.5 million during the nine months ended September 30, 2024, compared to $62.0 million during the nine months ended September 30, 2023. The $16.5 million decrease in general and administrative expenses is primarily attributable to the following:

Previous wording

•$5.1 million decrease in severance costs primarily related to separation agreements with former executive officers, including a $3.9 million decrease in share-based compensation related to the modification and acceleration of stock option vesting for former executives. Share-based compensation costs for the six months ended June 30, 2024 included $3.4 million in costs related to the modification and acceleration of vesting for former executive officers as compared to $7.3 million for the six months ended June 30, 2023; and

Current wording

•$8.2 million decrease in severance costs primarily related to separation agreements with former executive officers, including a $5.7 million decrease in share-based compensation related to the modification and acceleration of stock option vesting for former executives. Share-based compensation costs for the nine months ended September 30, 2024 included $3.4 million in costs related to the modification and acceleration of vesting for former executive officers as compared to $9.1 million for the nine months ended September 30, 2023; and

Previous wording

•$4.8 million decrease in personnel-related costs, primarily due to decrease in headcount and decrease in share-based compensation and other employee compensation and recruiting costs.

Current wording

•$8.8 million decrease in personnel-related costs, primarily due to a decrease in headcount and a decrease in share-based compensation and other employee compensation and recruiting costs.

Previous wording

Other income, net was $14.5 million during the six months ended June 30, 2024 compared to $8.5 million during the six months ended June 30, 2023. Other income, net for the six months ended June 30, 2024 is comprised of $15.6 million of interest income earned on cash equivalents and short-term investments as well as $0.2 million of sub-lease income, offset by $1.2 million in interest expense related to our Hercules Loan and Security Agreement (as defined below). Other income, net for the six months ended June 30, 2023 is comprised of $8.7 million of interest income earned on cash equivalents and short-term investments as well as $0.2 million of sub-lease income, offset by $0.3 million in interest expense related to our Hercules Loan and Security Agreement. The increase in interest income, as compared to prior year, is primarily attributable to higher average cash equivalent and short-term investment balances during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

Other income, net was $21.3 million during the nine months ended September 30, 2024 compared to $12.1 million during the nine months ended September 30, 2023. Other income, net for the nine months ended September 30, 2024 is comprised of $23.1 million of interest income earned on cash equivalents and short-term investments, $0.2 million gain on investment as well as $0.3 million of sub-lease income, offset by $1.7 million in interest expense related to our Hercules Loan and Security Agreement and $0.4 million loss on disposal of equipment. Other income, net for the nine months ended September 30, 2023 is comprised of $12.8 million of interest income earned on cash equivalents and short-term investments as well as $0.2 million of sub-lease income, partially offset by $0.8 million in interest expense related to our Hercules Loan and Security Agreement and a $0.2 million loss on debt extinguishment related to the Hercules Amendment. The increase in interest income, as compared to prior year, is primarily attributable to higher average cash equivalent and short-term investment balances during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Previous wording

We have funded our operations to date principally through proceeds received from the sale of our common stock, our Series A Preferred Stock, our Series B Preferred Stock and other equity securities, debt financings, license fees, and reimbursements received under collaboration agreements. As of June 30, 2024, we had $571.4 million in cash, cash equivalents, and short-term investments. We expect that our current cash, cash equivalents and short-term investments will be sufficient to fund our operations, including our clinical development plan described above, into the second half of 2026. In addition, as of June 30, 2024, the Company has access to additional undrawn funds under the Hercules Amended Term Loan, as described below.

Current wording

We have funded our operations to date principally through proceeds received from the sale of our common stock, our Series A Preferred Stock, our Series B Preferred Stock and other equity securities, debt financings, license fees, and reimbursements received under collaboration agreements. As of September 30, 2024, we had $753.2 million in cash, cash equivalents, and short-term investments. We expect that our current cash, cash equivalents and short-term investments will be sufficient to fund our operations, including our clinical development plan described above, into the second half of 2027. In addition, as of September 30, 2024, the Company has access to additional undrawn funds under the Hercules Amended Term Loan, as described below.

Previous wording

We have no products approved for commercial sale and have not generated any revenue from product sales. Since our inception and through June 30, 2024, we have generated an accumulated deficit of $839.4 million.

Current wording

We have no products approved for commercial sale and have not generated any revenue from product sales. Since our inception and through September 30, 2024, we have generated an accumulated deficit of $916.1 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

Previous wording

On April 1, 2022, we entered into a loan and security agreement (the “Hercules Loan and Security Agreement”) among the Company, certain of our subsidiaries from time to time party thereto (together with the Company, collectively, the “Borrower”), Hercules Capital, Inc. (“Hercules”) and certain other lenders party thereto (the “Lenders”). Under the Hercules Loan and Security Agreement, the Lenders provided us with access to a term loan with an aggregate principal amount of up to $75.0 million, in four tranches (collectively the “Term Loan”), consisting of: (1) an initial tranche of $25.0 million, which was available through June 15, 2023; (2) a second tranche of $10.0 million, subject to the achievement of certain regulatory milestones, which was available through June 15, 2023; (3) a third tranche of $15.0 million, subject to the achievement of certain regulatory milestones, which was available through March 15, 2024; and (4) a fourth tranche of $25.0 million, subject to approval by the Lenders’ investment committee(s), available through December 15, 2024. The milestone related to the third tranche was not achieved prior to amendment of the Hercules Loan and Security Agreement in August 2023. The first and second tranches of $25.0 million and $10.0 million, respectively, were available to us through June 15, 2023. Upon signing we drew an initial principal amount of $5.0 million.

Current wording

On April 1, 2022, we entered into a loan and security agreement (the “Hercules Loan and Security Agreement”) among the Company, certain of our subsidiaries from time to time party thereto (together with the Company, collectively, the “Borrower”), Hercules Capital, Inc. (“Hercules”) and certain other lenders party thereto (the “Lenders”). Under the Hercules Loan and Security Agreement, the Lenders provided us with access to a term loan with an aggregate principal amount of up to $75.0 million, in four tranches (collectively the “Term Loan”), including an initial tranche of $25.0 million, which was available through June 15, 2023.

Previous wording

Per the terms of the Hercules Loan and Security Agreement, we were originally obligated to make interest-only payments through April 1, 2024. However, upon the achievement of a development milestone in August 2022, the interest-only period was extended to October 1, 2024. If additional development milestones were met, the interest-only period would be further extended to April 1, 2025 pursuant to a second extension. We were required to repay the Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026. In addition, we were required to pay an end-of-term fee equal to 6% of the principal amount of funded Term Loan Advances (as defined in the Hercules Loan and Security Agreement) at maturity, which were being accreted as additional interest expense over the term of the loan.

Current wording

Per the terms of the Hercules Loan and Security Agreement, we were originally obligated to make interest-only payments through April 1, 2024, which was extended to October 1, 2024 upon the achievement of a development milestone in August 2022. We were required to repay the Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026. In addition, we were required to pay an end-of-term fee equal to 6% of the principal amount of funded Term Loan Advances (as defined in the Hercules Loan and Security Agreement) at maturity, which were being accreted as additional interest expense over the term of the loan.

Previous wording

Upon execution of the Hercules Amendment in August 2023, we drew a principal amount of $15.0 million. The Hercules Amendment was determined to substantially alter the Hercules Loan and Security Agreement and therefore was accounted for as a debt extinguishment. We recognized a loss on debt extinguishment of $0.2 million in August 2023 related to unamortized debt discount and debt issuance costs.

Current wording

In August 2023, we executed an amendment to the Hercules Loan and Security Agreement (the “Hercules Amendment”).The Hercules Amendment was determined to substantially alter the Hercules Loan and Security Agreement and therefore was accounted for as a debt extinguishment. We recognized a loss on debt extinguishment of $0.2 million in August 2023 related to unamortized debt discount and debt issuance costs.

Previous wording

In August 2023, we executed an amendment to the Hercules Loan and Security Agreement (the “Hercules Amendment”). Under the Hercules Amendment, the Lenders provided the Company access to an increased term loan with an aggregate principal amount of up to $150 million, in four tranches (collectively the “Amended Term Loan”), consisting of (1) an initial tranche of $50.0 million, $5.0 million of which was drawn at closing of the Hercules Loan and Security Agreement in April 2022, $15.0 million of which was drawn at closing of the Hercules Amendment in August 2023, $5.0 million of which was available through December 15, 2023, and $25.0 million available from July 1, 2024 through December 15, 2024; (2) a second tranche of $20.0 million, subject to achievement of certain regulatory milestones, available through February 15, 2025; (3) a third tranche of $20.0 million, subject to achievement of certain regulatory milestones, available through March 31, 2025; and (4) a fourth tranche of $60.0 million subject to approval by the Lenders’ investment committee(s), available through June 15, 2025. The milestones for the second and third tranches have not yet been achieved. The obligations of the Borrower under the Hercules Amendment agreement are secured by substantially all of the assets of the Borrower, excluding the Borrower’s intellectual property. The Amended Term Loan has a maturity date of October 1, 2026.

Current wording

Under the Hercules Amendment, the Lenders provided the Company access to an increased term loan with an aggregate principal amount of up to $150 million, in four tranches (collectively the “Amended Term Loan”), consisting of (1) an initial tranche of $50.0 million, $5.0 million of which was drawn at closing of the Hercules Loan and Security Agreement in April 2022, $15.0 million of which was drawn at closing of the Hercules Amendment in August 2023, $5.0 million of which was available through December 15, 2023, and $25.0 million available from July 1, 2024 through December 15, 2024; (2) a second tranche of $20.0 million, subject to achievement of certain regulatory milestones, available through February 15, 2025; (3) a third tranche of $20.0 million, subject to achievement of certain regulatory milestones, available through March 31, 2025; and (4) a fourth tranche of $60.0 million subject to approval by the Lenders’ investment committee(s), available through June 15, 2025. The milestones for the second and third tranches have not yet been achieved. The obligations of the Borrower under the Hercules Amendment agreement are secured by substantially all of the assets of the Borrower, excluding the Borrower’s intellectual property. The Amended Term Loan has a maturity date of October 1, 2026.

Previous wording

Per the terms of the Hercules Amendment, we are obligated to make interest-only payments through April 1, 2025. If certain development milestones related to our topline results for our ongoing phase 3 THRIVE or THRIVE-2 trials are met, then the interest-only period will be extended to October 1, 2025. If additional development milestones are met, the interest-only period will be further extended to April 1, 2026. The Borrower is required to repay the Amended Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026. In addition, the Borrower is required to pay an end-of-term fee equal to 6% of the principal amount of funded Amended Term Loan advances at maturity, which are being accreted as additional interest expense over the term of the loan.

Current wording

Per the terms of the Hercules Amendment, we were originally obligated to make interest-only payments through April 1, 2025. Upon achievement of certain development milestones related to our topline results for our phase 3 THRIVE trial in September 2024, the interest-only period was extended to October 1, 2025. If additional development milestones are met, the interest-only period will be further extended to April 1, 2026. The Borrower is required to repay the Amended Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026. In addition, the Borrower is required to pay an end-of-term fee equal to 6% of the principal amount of funded Amended Term Loan advances at maturity, which are being accreted as additional interest expense over the term of the loan.

Previous wording

In September 2022, we entered into an Open Market Sale Agreement SM (the “September 2022 ATM Agreement”) with Jefferies pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $175.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as the sales agent. Jefferies will receive a commission of 3.0% of the gross proceeds of any shares of common stock sold under the September 2022 ATM Agreement. During the year ended December 31, 2023, the Company sold 684,298 shares under the September 2022 ATM Agreement with Jefferies at a weighted average price of $22.30 per share, for aggregate net proceeds of approximately $14.8 million, including commissions to Jefferies as a sales agent. During the six months ended June 30, 2024, we sold 1,561,570 shares under the September 2022 ATM Agreement with Jefferies at a weighted average price of $23.22 per share, for aggregate net proceeds of approximately $35.2 million, including commissions to Jefferies as a sales agent. During the three months ended June 30, 2024, there were no sales under the September 2022 ATM Agreement.

Current wording

In September 2022, we entered into an Open Market Sale Agreement SM (the “September 2022 ATM Agreement”) with Jefferies pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $175.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as the sales agent. Jefferies will receive a commission of 3.0% of the gross proceeds of any shares of common stock sold under the September 2022 ATM Agreement. During the year ended December 31, 2023, the Company sold 684,298 shares under the September 2022 ATM Agreement with Jefferies at a weighted average price of $22.30 per share, for aggregate net proceeds of approximately $14.8 million, including commissions to Jefferies as a sales agent. During the nine months ended September 30, 2024, we sold 1,561,570 shares under the September 2022 ATM Agreement with Jefferies at a weighted average price of $23.22 per share, for aggregate net proceeds of approximately $35.2 million, including commissions to Jefferies as a sales agent. During the three months ended September 30, 2024, there were no sales under the September 2022 ATM Agreement.

Previous wording

Summarized cash flows for the six months ended June 30, 2024 and 2023 are as follows:

Current wording

Summarized cash flows for the nine months ended September 30, 2024 and 2023 are as follows:

Previous wording

Net cash used in operating activities was $91.3 million for the six months ended June 30, 2024, and primarily consisted of our net loss of $113.5 million, adjusted for non-cash items of $16.1 million (primarily share-based compensation of $24.5 million, offset by the accretion and amortization of premiums and discounts on available-for-sale securities of $9.1 million), and changes in working capital of $6.2 million. The change in working capital was primarily related to a net increase of $7.6 million in accounts payable and accrued and other liabilities and an increase of $1.3 million in prepaid expenses and other current assets due to the timing of payments to vendors for ongoing clinical trial and manufacturing activities.

Current wording

Net cash used in operating activities was $159.0 million for the nine months ended September 30, 2024, and primarily consisted of our net loss of $190.2 million, adjusted for non-cash items of $22.1 million (primarily share-based compensation of $33.2 million, offset by the accretion and amortization of premiums and discounts on available-for-sale securities of $12.4 million), and changes in working capital of $9.1 million. The change in working capital was primarily related to a net increase of $14.6 million in accounts payable and accrued and other liabilities, partially offset by an increase of $5.3 million in prepaid expenses and other current assets due to the timing of payments to vendors for ongoing clinical trial and manufacturing activities.

Previous wording

Net cash used in operating activities was $107.2 million for the six months ended June 30, 2023, and primarily consisted of a net loss of $123.2 million, adjusted for non-cash items of $27.0 million (primarily share-based compensation of $27.5 million) and changes in working capital of $11.0 million. The change in working capital was primarily related to a net decrease of $4.7 million in accounts payable and accrued and other liabilities and an increase of $5.4 million in prepaid expenses and other current assets due to the timing of payments to vendors for ongoing clinical trial and manufacturing activities.

Current wording

Net cash used in operating activities was $146.2 million for the nine months ended September 30, 2023, and primarily consisted of a net loss of $170.9 million, adjusted for non-cash items of $39.7 million (primarily share-based compensation of $41.1 million) and changes in working capital of $15.0 million. The change in working capital was primarily related to a net decrease of $10.3 million in accounts payable and accrued and other liabilities and an increase of $4.5 million in prepaid expenses and other current assets due to the timing of payments to vendors for ongoing clinical trial and manufacturing activities.

Previous wording

Net cash used in investing activities was $81.1 million during the six months ended June 30, 2024, and consisted primarily of $81.0 million in net purchases of short-term investments.

Current wording

Net cash used in investing activities was $165.7 million during the nine months ended September 30, 2024, and consisted primarily of $165.3 million in net purchases of short-term investments and $0.4 million in purchases of property and equipment.

Previous wording

Net cash provided by investing activities was $27.4 million during the six months ended June 30, 2023, and consisted primarily of $27.9 million in net maturities of short-term investments, offset by $0.4 million in purchases of property and equipment.

Current wording

Net cash provided by investing activities was $75.5 million during the nine months ended September 30, 2023, and consisted primarily of $76.3 million in net maturities of short-term investments, offset by $0.9 million in purchases of property and equipment.

Previous wording

Net cash provided by financing activities was $177.2 million during the six months ended June 30, 2024, and consisted of primarily of net proceeds of $175.8 million from the 2024 Public Offering and the September 2022 ATM Agreement, as well as $1.0 million in proceeds from the exercise of stock options and $0.4 million in proceeds from the issuance of common stock under our employee stock purchase plan.

Current wording

Net cash provided by financing activities was $422.2 million during the nine months ended September 30, 2024, and consisted of primarily of net proceeds of $419.4 million from the January 2024 Public Offering, September 2024 Public Offering and the September 2022 ATM Agreement, as well as $2.2 million in proceeds from the exercise of stock options and $0.7 million in proceeds from the issuance of common stock under our employee stock purchase plan.

Previous wording

Net cash provided by financing activities was $11.3 million during the six months ended June 30, 2023, and consisted primarily of $9.1 million in proceeds from the exercise of stock options, $1.9 million in proceeds from the exercise of warrants and $0.3 million in proceeds from the issuance of common stock under our employee stock purchase plan.

Current wording

Net cash provided by financing activities was $26.7 million during the nine months ended September 30, 2023, and consisted primarily of $14.5 million in net proceeds from the Hercules Amendment, as well as $9.8 million in proceeds from the exercise of stock options, $1.9 million in proceeds from the exercise of warrants and $0.6 million in proceeds from the issuance of common stock under our employee stock purchase plan.