Foghorn Therapeutics Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in this Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Some of the numbers included herein have been rounded for the convenience of presentation. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in this Quarterly Report on Form 10-Q.

Previous wording

Foghorn is a clinical stage, precision therapeutics biotechnology company pioneering a new class of medicines that treat serious diseases by correcting abnormal gene expression through selectively targeting the chromatin regulatory system, an untapped opportunity for therapeutic intervention in oncology and with potential in a wide spectrum of other diseases including virology, autoimmune diseases and neurology.

Current wording

Foghorn is a clinical stage, precision therapeutics biotechnology company pioneering a new class of medicines that treat serious diseases by correcting abnormal gene expression through selectively targeting the chromatin regulatory system, an untapped opportunity for therapeutic intervention in oncology and with potential in a wide spectrum of other diseases.

Previous wording

At present, we are working on more than eight programs with one clinical-stage drug candidate currently in Phase 1 development and one drug candidate with an Investigational New Drug Application (“IND”) submitted in April 2024 and anticipated to enter clinical development later this year. We have discovered highly selective chemical matter for some of the most challenging targets in oncology including BRM, CBP, EP300 and ARID1B as well as other undisclosed targets. We believe our current pipeline has the potential to help more than 500,000 cancer patients. We take a small molecule modality agnostic approach to drugging targets which includes protein degraders, allosteric enzymatic inhibitors, and transcription factor disruptors. We are a biology first company which means we focus first on the underlying genetics and biology of a disease relevant target and then leverage the most appropriate drugging approach to impact the disease biology.

Current wording

At present, we are working on more than eight programs with one clinical-stage drug candidate currently in Phase 1 development and one drug candidate with an Investigational New Drug Application (“IND”) submitted in April 2024 and anticipated to enter clinical development later this year. We have discovered highly selective chemical matter for some of the most challenging targets in oncology including SMARCA2 (BRM), CBP, EP300 and ARID1B as well as other undisclosed targets. We believe our current pipeline has the potential to help more than 500,000 cancer patients. We take a small molecule modality agnostic approach to drugging targets which includes protein degraders, allosteric enzymatic inhibitors, and transcription factor disruptors. We are a biology first company which means we focus first on the underlying genetics and biology of a disease relevant target and then leverage the most appropriate drugging approach to impact the disease biology.

Previous wording

We are currently conducting a Phase 1 dose escalation study of FHD-286, a selective, allosteric ATPase inhibitor of BRM and BRG1, in combination with either decitabine or cytarabine in relapsed and/or refractory acute myeloid leukemia patients. As part of our collaboration with Loxo Oncology at Eli Lilly and Company (“Lilly”), we anticipate that a Phase 1 dose escalation study will start later this year with FHD-909, a selective ATPase inhibitor of BRM.

Current wording

We are currently conducting a Phase 1 dose escalation study of FHD-286, a selective, allosteric ATPase inhibitor of SMARCA2 (BRM) and SMARCA4 (BRG1), in combination with either decitabine or cytarabine in relapsed and/or refractory acute myeloid leukemia patients. As part of our collaboration with Eli Lilly and Company (“Lilly”), we anticipate that a Phase 1 dose escalation study will start later this year with FHD-909, a selective ATPase inhibitor of SMARCA2 (BRM).

Previous wording

During the third quarter of 2023, we transitioned the BRM Selective inhibitor program to Lilly which triggered the 50/50 cost share for the BRM programs. Costs related to the cost-share are included in research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

Current wording

During the third quarter of 2023, we transitioned the SMARCA2 (BRM) Selective inhibitor, FHD-909, to Lilly which triggered the 50/50 cost share for the SMARCA2 (BRM) programs. Costs related to the cost-share are included in research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

Previous wording

We have incurred significant operating losses since our inception. For the three months ended March 31, 2024 and the year ended December 31, 2023, we reported net losses of $25.0 million and $98.4 million, respectively. As of March 31, 2024, we had an accumulated deficit of $496.6 million. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more product candidates we are developing or may develop.

Current wording

We have incurred significant operating losses since our inception. For the six months ended June 30, 2024 and the year ended December 31, 2023, we reported net losses of $48.0 million and $98.4 million, respectively. As of June 30, 2024, we had an accumulated deficit of $519.6 million. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. Our ability to generate any product revenue or product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more product candidates we are developing or may develop.

Previous wording

• advance FHD-286 and continue preclinical and clinical development of product candidates from our current portfolio, including those partnered with Lilly;

Current wording

• advance FHD-286 and continue preclinical and clinical development of product candidates from our current portfolio, including FHD-909 and other product candidates partnered with Lilly;

Previous wording

In December of 2021, we entered into a strategic collaboration with Lilly to create novel oncology medicines by applying Foghorn’s proprietary Gene Traffic Control platform. The collaboration includes a co-development and co-commercialization agreement for the aforementioned selective BRM oncology program and an additional undisclosed oncology target. In addition, the collaboration includes three additional discovery programs using Foghorn’s proprietary Gene Traffic Control platform. Under the terms of the collaboration, Foghorn received upfront consideration of $300.0 million in cash pursuant to the Lilly Collaboration Agreement, together with an equity investment by Lilly of $80.0 million in shares of Foghorn common stock pursuant to the Lilly SPA.

Current wording

In December of 2021, we entered into a strategic collaboration with Lilly to create novel oncology medicines by applying Foghorn’s proprietary Gene Traffic Control platform. The collaboration includes a co-development and co-commercialization agreement for the aforementioned selective SMARCA2 (BRM) oncology program and an additional undisclosed oncology target. In addition, the collaboration includes three additional discovery programs using Foghorn’s proprietary Gene Traffic Control platform. Under the terms of the collaboration, Foghorn received upfront consideration of $300.0 million in cash pursuant to the Lilly Collaboration Agreement, together with an equity investment by Lilly of $80.0 million in shares of Foghorn common stock pursuant to the Lilly SPA.

Previous wording

For the BRM-selective program and the additional undisclosed target program, Foghorn will lead discovery and early research activities, while Lilly will lead development and commercialization activities with participation from Foghorn in operational activities and cost sharing. Foghorn and Lilly will share 50/50 in the U.S. economics, and Foghorn is eligible to receive royalties on ex-U.S. sales starting in the low double-digit range and escalating into the twenties based on revenue levels.

Current wording

For the SMARCA2 (BRM) selective program and the additional undisclosed target program, Foghorn will lead discovery and early research activities, while Lilly will lead development and commercialization activities with participation from Foghorn in operational activities and cost sharing. Foghorn and Lilly will share 50/50 in the U.S. economics, and Foghorn is eligible to receive royalties on ex-U.S. sales starting in the low double-digit range and escalating into the twenties based on revenue levels.

Previous wording

In the third quarter of 2023, we transitioned the BRM Selective inhibitor program to Lilly, for which Lilly will lead and we will participate and share in 50% of the costs until registrational trials. Costs incurred will continue to be included in research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

Current wording

In the third quarter of 2023, we transitioned the SMARCA2 (BRM) Selective inhibitor, FHD-909, to Lilly, for which Lilly will lead and we will participate and share in 50% of the costs until registrational trials. Costs incurred will continue to be included in research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

Previous wording

We recognized total deferred revenue of $337.8 million related to the Lilly Collaboration Agreement and the Lilly SPA, which included the $300.0 million upfront payment under the Lilly Collaboration Agreement as well as $37.8 million allocated to deferred revenue from the gross proceeds of the Lilly SPA to be recognized over the performance period. For the three months ended March 31, 2024 and 2023, we recognized $5.1 million and $4.7 million, respectively, of revenue under the Lilly Collaboration Agreement and, as of March 31, 2024, we had $297.6 million of deferred revenue related to the above mentioned upfront payment and revenue allocation remaining on our condensed consolidated balance sheets.

Current wording

We recognized total deferred revenue of $337.8 million related to the Lilly Collaboration Agreement and the Lilly SPA, which included the $300.0 million upfront payment under the Lilly Collaboration Agreement as well as $37.8 million allocated to deferred revenue from the gross proceeds of the Lilly SPA to be recognized over the performance period. For the three months ended June 30, 2024 and 2023, the Company had recorded $6.9 million and $5.2 million, respectively, of revenue under the Lilly Collaboration Agreement. For the six months ended June 30, 2024 and 2023, we recognized $11.9 million and $10.0 million, respectively, of revenue under the Lilly Collaboration Agreement. As of June 30, 2024, we had $290.7 million of deferred revenue related to the above mentioned upfront payment and revenue allocation remaining on our condensed consolidated balance sheets.

Previous wording

For the three months ended March 31, 2024 and 2023, we recognized none and $0.6 million, respectively, of revenue under the Merck Collaboration Agreement. As of March 31, 2024, we had no deferred revenue, and no corresponding deferred revenue remaining, related to the upfront payment and milestone achievement remaining on our condensed consolidated balance sheets.

Current wording

For the three months ended June 30, 2024 and 2023, we recognized none and $0.4 million, respectively, of revenue under the Merck Collaboration Agreement. For the six months ended June 30, 2024 and 2023, we recognized none and $1.0 million, respectively, of revenue under the Merck Collaboration Agreement. As of June 30, 2024, we had no deferred revenue, and no corresponding deferred revenue remaining, related to the upfront payment and milestone achievement remaining on our condensed consolidated balance sheets.

Previous wording

•expenses incurred in connection with our research programs and preclinical and clinical development of our product candidates, including under agreements with third parties, such as consultants and contractors and contract research organizations (“CROs”);

Current wording

•expenses incurred in connection with our research programs and preclinical and clinical development of our product candidates, including under agreements with third parties, such as consultants and contractors and contract research organizations (“CROs”) and our collaboration partner;

Previous wording

As of December 31, 2023, we had federal net operating loss carryforwards of $3.0 million, which may be available to offset future taxable income. The federal net operating loss can be carried forward indefinitely but, in some circumstances, may be limited to offset 80% of annual taxable income. As of December 31, 2023, we also had federal and state research and development tax credit carryforwards of $3.7 million and $2.6 million, respectively, which may be available to reduce future tax liabilities and expire at various dates beginning in 2041 and 2037, respectively. Due to our history of cumulative net losses since inception and uncertainties surrounding our ability to generate future taxable income, we have recorded a full valuation allowance against our net deferred tax assets at each balance sheet date. We do not expect to have taxable income in the current year.

Current wording

As of December 31, 2023, we had federal net operating loss carryforwards of $3.0 million, which may be available to offset future taxable income. The federal net operating loss can be carried forward indefinitely but are limited to offset 80% of annual taxable income. As of December 31, 2023, we also had federal and state research and development tax credit carryforwards of $3.7 million and $2.6 million, respectively, which may be available to reduce future tax liabilities and expire at various dates beginning in 2041 and 2037, respectively. Due to our history of cumulative net losses since inception and uncertainties surrounding our ability to generate future taxable income, we have recorded a full valuation allowance against our net deferred tax assets at each balance sheet date. We do not expect to have taxable income in the current year.

Previous wording

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of our condensed 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 condensed consolidated 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. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Current wording

Our unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of our unaudited condensed 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 unaudited condensed consolidated 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. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Previous wording

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as well as elsewhere in this Quarterly Report on Form 10-Q, webelieve that revenue recognition and accrued research and development expenses are those most critical to the judgments and estimates used in the preparation of our condensed consolidated financial statements. There have been no material changes to our critical accounting policies and estimates detailed in the Critical Accounting Policies and Significant Judgements section of Item 7. Managements Discussion and Analysis of financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Current wording

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as well as elsewhere in this Quarterly Report on Form 10-Q, webelieve that revenue recognition and accrued research and development expenses are those most critical to the judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements. There have been no material changes to our critical accounting policies and estimates detailed in the Critical Accounting Policies and Significant Judgements section of Item 7. Management’s Discussion and Analysis of financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Previous wording

Comparison of the Three Months Ended March 31, 2024 and 2023

Current wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

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

Current wording

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

Previous wording

Under our collaboration agreements, revenue is recognized based on the work performed during the period. Collaboration revenue was $5.1 million for the three months ended March 31, 2024, compared to $5.3 million for the three months ended March 31, 2023. The decrease in collaboration revenue is attributed to the following:

Current wording

Under our collaboration agreements, revenue is recognized based on the work performed during the period. Collaboration revenue was $6.9 million for the three months ended June 30, 2024, compared to $5.6 million for the three months ended June 30, 2023. The increase in collaboration revenue is attributed to the following:

Previous wording

•an increase in Lilly collaboration revenue recognition of $0.3 million primarily due to continued advancement of programs under the Lilly Collaboration Agreement.

Current wording

•an increase in Lilly collaboration revenue recognition of $1.7 million primarily due to continued advancement of programs under the Lilly Collaboration Agreement.

Previous wording

•a decrease in Merck collaboration revenue recognition of $0.6 million driven by the termination of the Merck Collaboration Agreement in 2023;

Current wording

•a decrease in Merck collaboration revenue recognition of $0.4 million driven by the termination of the Merck Collaboration Agreement in 2023.

Previous wording

The following table summarizes our research and development expenses for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our research and development expenses for the three and six months ended June 30, 2024 and 2023:

Previous wording

Research and development expenses were $25.5 million for the three months ended March 31, 2024, compared to $30.0 million for the three months ended March 31, 2023. The decrease is attributed to the following:

Current wording

Research and development expenses were $23.8 million for the three months ended June 30, 2024, compared to $29.2 million for the three months ended June 30, 2023. The decrease is attributed to the following:

Previous wording

•a decrease in personnel-related costs of $2.7 million, including a $0.7 million decrease in stock-based compensation expense, due to decreased headcount in our research and development function compared to the prior period;

Current wording

•a decrease in personnel-related costs of $3.0 million, including a $0.7 million decrease in stock-based compensation expense, due to decreased headcount in our research and development function compared to the prior period;

Previous wording

•a decrease in our FHD-286 program costs of $0.5 million, primarily driven by a decline in clinical trial spend due to the completion and wind down of the Phase 1 uveal melanoma study.

Current wording

•an increase in our FHD-286 program costs of $0.6 million, primarily driven by an increase in clinical trial spend related to the progression of the Phase 1 dose escalation study in acute myeloid leukemia, partially offset by a decline in clinical trial spend due to the completion and wind down of the Phase 1 uveal melanoma study.

Previous wording

•a decrease in early development and other research external costs of $0.6 million; which was driven by a $2.3 million decrease in FHD-609 spend due to the shutdown of the Phase 1 clinical trial in synovial sarcoma and SMARCAB1-loss tumors, partially offset by the continued investment and development of our platform and early research pipeline, including an increase of $0.9 million related to the advancement of Lilly partnered targets; and

Current wording

•a decrease in early development and other research external costs of $2.8 million; which was driven by a $4.9 million decrease in FHD-609 spend due to the shutdown of the Phase 1 clinical trial in synovial sarcoma and SMARCAB1- loss tumors, partially offset by the continued investment and development of our platform and early research pipeline, including an increase of $1.2 million related to the advancement of Lilly partnered targets; and

Previous wording

•a decrease in facilities and IT related expenses of $0.7 million, due to decreased headcount in our research and development function compared to the prior period;

Current wording

•a decrease in facilities and IT related expenses of $1.5 million, due to decreased headcount in our research and development function compared to the prior period.

Previous wording

The following table summarizes our general and administrative expenses for the three months ended March 31, 2024 and 2023:

Current wording

The following table summarizes our general and administrative expenses for the three and six months ended June 30, 2024 and 2023:

Previous wording

General and administrative expenses were $7.7 million for the three months ended March 31, 2024, compared to $8.6 million for the three months ended March 31, 2023. The decrease is primarily attributed to a decrease in personnel-related costs of $1.3 million, including a $0.7 million decrease in stock-based compensation expense, which was the result of decreased headcount in our general and administrative function compared to the prior period.

Current wording

General and administrative expenses were $7.3 million for the three months ended June 30, 2024, compared to $8.4 million for the three months ended June 30, 2023. The decrease is primarily attributed to a decrease in personnel-related costs of $1.1 million, including a $0.6 million decrease in stock-based compensation expense, which was the result of decreased headcount in our general and administrative function compared to the prior period.

Previous wording

Other income, net was $3.2 million for the three months ended March 31, 2024, compared to $3.4 million for the three months ended March 31, 2023, which was relatively flat period-over-period.

Current wording

Other income, net was $3.7 million for the three months ended June 30, 2024, compared to $3.5 million for the three months ended June 30, 2023, which was relatively flat period-over-period.

Previous wording

For the three months ended March 31, 2024, we recorded an income tax provision of none compared to $0.6 million for the three months ended March 31, 2023. The income tax provision for the three months ended March 31, 2023 was primarily driven by the federal and state taxes related to the $300.0 million upfront payment for Lilly Collaboration Agreement, which were recognized as taxable income in 2023, and the required capitalization of research and development costs pursuant to

Current wording

The Company did not record a provision for income taxes the three and six months ended June 30, 2024. The income tax provision for the three and six months ended June 30, 2023 of $0.9 million and $1.5 million, respectively, was primarily driven by the federal and state taxes related to the $300.0 million upfront payment for the Lilly Collaboration Agreement, which were recognized as taxable income in 2023, and the required capitalization of research and development costs pursuant to Internal Revenue Code Section 174.

Previous wording

Since our inception in October 2015, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we support our continued research activities and development of our programs and platform. Through March 31, 2024, we have funded our operations with proceeds from our initial public offering (“IPO”) in October 2020, sales of preferred stock, term loans, an upfront payment of $15.0 million we received in July 2020 under the Merck Collaboration Agreement, proceeds we received in December 2021 under the Lilly SPA of $80.0 million; an upfront payment of $300.0 million received in January 2022 under the Lilly Collaboration Agreement and a payment of $5.0 million received from Merck under the Merck Collaboration Agreement for the achievement of a research milestone. As of March 31, 2024, we had cash, cash equivalents and marketable securities of $206.7 million.

Current wording

Since our inception in October 2015, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we support our continued research activities and development of our programs and platform. Through June 30, 2024, we have funded our operations with proceeds from our initial public offering (“IPO”) in October 2020, sales of preferred stock, term loans, an upfront payment of $15.0 million we received in July 2020 under the

Previous wording

During the three months ended March 31, 2024, operating activities used $29.3 million of cash, resulting from the net cash used to fund our net loss of $25.0 million and changes in our operating assets and liabilities of $9.3 million partially offset by net non-cash charges of $4.9 million. Net cash used by changes in our operating assets and liabilities for the three months ended March 31, 2024 was primarily driven by a $5.1 million decrease in deferred revenue resulting from the recognition of revenue on the upfront payments received in connection with the the Lilly Collaboration Agreement, a $2.1 million net decrease in working capital and a $2.1 million decrease in operating lease liabilities .

Current wording

During the six months ended June 30, 2024, operating activities used $54.9 million of cash, resulting from the net cash used to fund our net loss of $48.0 million and changes in our operating assets and liabilities of $18.9 million partially offset by net non-cash charges of $12.0 million. Net cash used by changes in our operating assets and liabilities for the six months ended June 30, 2024 was primarily driven by a $11.9 million decrease in deferred revenue resulting from the recognition of revenue on the upfront payments received in connection with the Lilly Collaboration Agreement, a $4.2 million decrease in operating lease liabilities and a $2.8 million net decrease in working capital.

Previous wording

During the three months ended March 31, 2023, operating activities used $31.2 million of cash, resulting from the net cash used to fund our net loss of $30.5 million and our changes in our operating assets and liabilities of $6.6 million partially offset by net non-cash charges of $5.9 million. Net cash used by changes in our operating assets and liabilities for the three months ended March 31, 2023 consisted primarily of $5.3 million decrease in deferred revenue resulting from the recognition of revenue on the upfront payments received in connection with our collaboration agreements and a $1.7 million decrease in operating lease liabilities partially offset by a $0.4 million net increase in working capital.

Current wording

During the six months ended June 30, 2023, operating activities used $63.4 million of cash, resulting from the net cash used to fund our net loss of $60.0 million and our changes in our operating assets and liabilities of $15.1 million partially offset by net non-cash charges of $11.8 million. Net cash used by changes in our operating assets and liabilities for the six months ended June 30, 2023 consisted primarily of $10.9 million decrease in deferred revenue resulting from the recognition of revenue on the upfront payments received in connection with our collaboration agreements, a $3.6 million decrease in operating lease liabilities and a $0.7 million net increase in working capital.

Previous wording

During the three months ended March 31, 2024, net cash provided by investing activities was $27.1 million consisting of $58.5 million of maturities of marketable securities partially offset by $31.3 million of purchases of marketable securities and $0.1 million in purchases of property and equipment.

Current wording

During the six months ended June 30, 2024, net cash provided by investing activities was $9.1 million consisting of $106.6 million of maturities of marketable securities partially offset by $97.4 million of purchases of marketable securities and $0.1 million in purchases of property and equipment.

Previous wording

During the three months ended March 31, 2023, net cash provided by investing activities was $29.5 million consisting of $56.4 million of maturities of marketable securities partially offset by $26.2 million of purchases of marketable securities and $0.6 million in purchases of property and equipment.

Current wording

During the six months ended June 30, 2023, net cash provided by investing activities was $68.6 million consisting of $132.9 million of maturities of marketable securities partially offset by $63.2 million of purchases of marketable securities and $1.1 million in purchases of property and equipment.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities was $1.2 million consisting of net proceeds from the exercise of common stock options and the 2020 Employee Stock Purchase Plan (“ESPP”).

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities was $104.4 million consisting of net proceeds from the offering of our common stock and prefunded warrants of $103.2 million, after deducting underwriting discounts, commissions and other offering expenses that have been paid in during the six months ended June 30, 2023, and net proceeds from the exercise of common stock options and the 2020 Employee Stock Purchase Plan (“ESPP”) of $1.2 million.

Previous wording

During the three months ended March 31, 2023, net cash provided by financing activities was $0.1 million consisting of net proceeds from the exercise of common stock options and the ESPP.

Current wording

During the six months ended June 30, 2023, net cash provided by financing activities was $0.2 million consisting of net proceeds from the exercise of common stock options and the ESPP.

Previous wording

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities, initiate clinical trials for our product candidates in development, including those partnered with Lilly, and continue to fund on-going clinical activities. As of the issuance date of these interim condensed consolidated financial statements, we expect that our cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements for at least twelve months. We have based this estimate on assumptions that may prove to be inaccurate. We could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing sooner than planned, which may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our long-term business strategy. We will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.

Current wording

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities, initiate clinical trials for our product candidates in development, including those partnered with Lilly, and continue to fund on-going clinical activities. As of the issuance date of these interim unaudited condensed consolidated financial statements, we expect that our cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements for at least twelve months. We have based this estimate on assumptions that may prove to be inaccurate. We could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing sooner than planned, which may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our long-term business strategy. We will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.