Absci Corp
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
ABSI$10.17+8.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001628280-24-023062
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001628280-24-037193
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 117 current paragraphs.
60 unchanged; 50 reworded; 7 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
•develop our internal pipeline of drug candidates across diverse indications, including the advancement of these candidates through preclinical and clinical development;
Current report
Goodwill impairment
Current report
Goodwill is tested for impairment on an annual basis in the fourth fiscal quarter, or sooner if an indicator of impairment exists. We performed a quantitative impairment evaluation of goodwill as of June 30, 2023 and recorded a full impairment charge in the amount of $21.3 million.
Current report
Research and development expenses increased by $3.1 million, or 26%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily attributable to an increase in lab operations costs, including direct costs associated with IND-enabling studies for ABS-101, of $2.3 million, an increase in stock-based compensation of $0.7 million, an increase in administrative costs of $0.1 million, and an increase in personnel costs of less than $0.1 million.
Current report
Research and development expenses increased by $2.7 million, or 11%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily attributable to an increase in lab operations costs of $2.3 million, an increase in stock-based compensation of $1.1 million, offset by a decrease in personnel costs of $0.7 million.
Current report
Goodwill impairment
Current report
We performed a quantitative impairment evaluation of goodwill as of June 30, 2023 and recorded an impairment charge in the amount of$21.3 million.
Removed paragraphs (3)
Previous report
•develop our internal proprietary asset pipeline of lead drug candidates;
Previous report
•Increase the number of programs under existing partnerships: The execution of our long-term strategy relies substantially on the value our partners believe can be recognized from our programs. Our continued growth depends on our ability to expand the scope of our existing partnerships and add new molecules for drug creation partnerships with current partners.
Previous report
Internal Asset Programs
Reworded paragraphs (50)
Previous wording
Antibody-based therapeutics represent an extraordinary medical and economic opportunity, yet the biopharmaceutical industry faces significant challenges in bringing these life-changing medicines to patients. Our Integrated Drug Creation platform is designed to improve upon traditional biologic drug discovery by using AI to simultaneously optimize multiple drug characteristics that may be important to development and therapeutic benefit. This has the potential to significantly shorten time to clinic and increase the probability of success. Our approach expands the possibilities in biopharmaceuticals — shifting from a paradigm of drug discovery to drug creation — with the goal of bringing best-in-class and first-in-class antibody therapeutics to the patients who need them.
Current wording
Antibody-based therapeutics represent an extraordinary medical and economic opportunity, yet the biopharmaceutical industry faces significant challenges in bringing these life-changing medicines to patients. Our proprietary Integrated Drug Creation platform is designed to improve upon traditional biologic drug discovery by using AI to simultaneously optimize multiple drug characteristics that may be important to development and therapeutic benefit. This has the potential to significantly shorten time to clinic and increase the probability of success. Our approach expands the possibilities in biopharmaceuticals — shifting from a paradigm of drug discovery to drug creation — with the goal of bringing best-in-class and first-in-class antibody therapeutics to the patients who need them.
Previous wording
Generative AI depends on massive training datasets to generate quality results. For example, GPT-4, a well-known generative AI model, was trained on data at scale readily available through public sources such as the internet. Such a data set does not exist for drug discovery. For this reason, current AI drug discovery mainly focuses on small-molecule drugs. Their simpler structure allows the synthesis and screening of million-member chemical libraries, which can then provide training data for generative AI models. In contrast, using AI models to design biologic drugs is more challenging because the existing biological datasets are much smaller, meaning there is less training data available for developing highly predictive AI models. Biologic drugs, however, are inherently more selective than small molecules and hence have in general better safety profiles in patients. Hence, building large training data sets for biologic drugs interactions offers the potential for AI models to design highly specific, safe therapeutics for a wide variety of disease targets less addressable by small molecules.
Current wording
Generative AI depends on massive training datasets to generate quality results. For example, GPT-4, a well-known generative AI model, was trained on data at scale readily available through public sources such as the internet. Small molecule drugs’ simpler structures allows the synthesis and screening of million-member chemical libraries, which can then provide training data for generative AI models. In contrast, using AI models to design biologic drugs is more challenging because biologic drugs are inherently more complex and the existing biological datasets are much smaller, meaning there is less training data available for developing highly predictive AI models. Biologic drugs, however, tend to be more selective than small molecules and may generally provide better safety profiles in patients. Hence, building large training data sets for biologic drugs interactions offers the potential for AI models to design highly specific, safe therapeutics for a wide variety of disease targets less addressable by small molecules.
Previous wording
Our AI models accelerate the design and optimization of antibody candidates with potentially novel, best-in-class attributes. We then use our proprietary wet lab assays to validate those antibody candidates at scale. This combination ofin silico modeling with wet lab testing allows us to generate immense real-world datasets that we harness to train and refine our deep learning models.
Current wording
Our AI models accelerate the design and optimization of potential biologic drug candidates, including for example, antibody drug candidates, with potentially novel, best-in-class attributes. We then use our proprietary wet lab assays to validate those drug candidates at scale. This combination ofin silico modeling with wet lab testing allows us to generate immense real-world datasets that we harness to train and refine our deep learning models.
Previous wording
Through iterative AI predictions, wet lab validation, and AI training we enable a virtuous cycle that we believe will accelerate us toward fullyin silico biologic drug discovery. With the data to learn, the AI to create, and the wet lab to validate, Absci can create billions of antibody designs and screen millions of ranked antibody sequences in weeks, allowing us to go from AI-designed antibodies to wet lab-validated candidates in as little as six weeks. Our unique Integrated Drug Creation approach has the potential to significantly shorten preclinical development timelines from 5-7 years in benchmarked timelines to 18-24 months, enabling us to build a strong pipeline of both partnered and wholly-owned candidates that can expand therapeutic possibilities.
Current wording
Through iterative AI predictions, wet lab validation, and AI training we enable a virtuous cycle that we believe will accelerate us toward fullyin silico biologic drug discovery. With the data to learn, the AI to create, and the wet lab to validate, Absci can create billions of biologic drug designs, including, for example, antibody designs, and screen millions of ranked sequences in weeks, allowing us to go from AI-designed candidates to wet lab-validated candidates in as little as six weeks. Our unique Integrated Drug Creation platform has the potential to significantly shorten preclinical development timelines from 5-7 years in benchmarked timelines to 18-24 months, enabling us to build a strong pipeline of both partnered and wholly-owned drug candidates that can expand therapeutic possibilities.
Previous wording
Our business model is to use our platform for rapid creation of biologic drug candidates by:
Current wording
Our business model is to use our platform technology, including our Integrated Drug Creation platform, for rapid creation of drug candidates. The cornerstone of this business model lies in the potential for diversification of risk and return on investment. We aim to achieve this by:
Previous wording
Establishing partnerships with stakeholders in the drug discovery and development life cycle: We create drug candidates with partners, including pharmaceutical and biotechnology companies who are responsible for preclinical and clinical testing of biologic candidates generated through our platform. Our partnerships will provide us with the opportunity to participate in the future success of the biologic candidates generated utilizing our platform, including through potential clinical, regulatory and commercial milestone payments as well as royalties on net sales of approved products. We aim to assemble economic interests in a diversified portfolio of partnered pipeline assets of biologics across multiple indications.
Current wording
Establishing partnerships with stakeholders in the drug discovery and development life cycle: We create drug candidates with partners, including pharmaceutical and biotechnology companies, providing us with the opportunity to participate in the future success of the drug candidates generated utilizing our platform. We structure partnerships to reflect the needs of the program and contributions from each partner. These partnerships may provide us with potential upfront payments, clinical and commercial milestones, and royalties on net sales or may take the form of programs where both parties contribute to discovery and development activities in which costs and downstream economic potential are shared based on the parties’ respective ongoing program participation. We aim to assemble economic interests in a diversified portfolio of partnered pipeline assets of drug candidates across diverse indications.
Previous wording
Developing our own proprietary asset pipeline: We aim to create therapeutic assets comprising our own internal program pipeline. With the ability to find targets and develop potential best-in-class assets, we intend to develop promising assets to value inflection points, anywhere from preclinical validation through clinical trials, before partnering or selling them. We may enter into clinical trials and/or manufacturing partnerships to advance specific therapeutic assets to target such value inflection points. We believe that by developing our own pipeline, we will create optionality for enhanced monetization and validation of our platform.
Current wording
Developing our own proprietary asset pipeline: We also aim to create our own internal pipeline comprising drug candidates across diverse indications. With the ability to identify targets and develop potential best-in-class assets, we intend to develop promising drug candidates to value inflection points, anywhere from preclinical validation through clinical trials, before partnering or selling them. We may enter into clinical trials and/or manufacturing partnerships to advance specific assets to target such value inflection points.
Previous wording
Our evolving business model is underpinned by a strategic shift towards diversifying our program portfolio through both partnered drug creation programs and internal asset development programs. Our approach is to balance the portfolio between partnered programs that broaden our reach into various indications and provide R&D and upfront funding, and internal programs for which we have more control and the potential for partnerships or asset sales that provide more significant economic returns. The cornerstone of this business model evolution lies in the diversification of risk and potential return on investment. Engaging in drug creation partnerships may enable us to reach broader indications and markets, whereas internal asset development may be more advantageous in terms of greater control over program selection, development timeline, and return on investment. Our dual-faceted model not only secures a focused set of indications but also gives us greater optionality, enhancing our ability to pivot and adapt as the programs progress. We believe we will grow and diversify our portfolio of programs through our model, ultimately driving innovation and delivering value for all stakeholders.
Current wording
We balance the portfolio between partnered programs that broaden our reach into diverse indications with a variety of economic structures and internal programs for which we have more control and the potential for partnerships or asset sales that provide greater economic returns.
Previous wording
Total revenue was $0.9 million and $1.3 million for the three months ended March 31, 2024 and 2023, respectively, due to timing of project-based milestones achieved and the mix of ongoing programs utilizing our Integrated Drug Creation platform. We incurred a net loss of $22.0 million and $23.4 million for the three months ended March 31, 2024 and 2023, respectively. Research and development expenses decreased by $0.4 million, or 3%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. As of March 31, 2024, we had an accumulated deficit of $428.5 million and cash and cash equivalents and short-term investments totaling $161.5 million.
Current wording
Total revenue was $1.3 million and $2.2 million for the three and six months ended June 30, 2024, respectively, and $3.4 million and $4.6 million for the three and six months ended June 30, 2023, respectively, due to timing of project-based milestones achieved and the mix of ongoing programs utilizing our Integrated Drug Creation platform. We incurred a net loss of $24.8 million and $46.7 million for the three and six months ended June 30, 2024, respectively, compared to a net loss of $41.7 million and $65.0 million for the three and six months ended June 30, 2023, respectively, which include a non-cash goodwill impairment charge in the amount of $21.3 million recorded during the quarter ended June 30, 2023. Research and development expenses increased by $2.7 million, or 11%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. As of June 30, 2024, we had an accumulated deficit of $453.2 million and cash and cash equivalents and short-term investments totaling $145.2 million.
Previous wording
•continue to engage in research and development efforts and scale our drug creation activities to meet potential demand at a reasonable cost;
Current wording
•continue to engage in discovery, research and development efforts and scale our activities to meet potential demand from both new and existing partners at a reasonable cost;
Previous wording
•implement an effective business development strategy to drive adoption of our Integrated Drug Creation platform by new and existing partners;
Current wording
•execute an effective business development strategy to drive adoption of our Integrated Drug Creation platform by new and existing partners;
Previous wording
•Create our proprietary asset pipeline: We are in the process of selectively creating our own lead drug candidates and intend to advance them up to value inflection points anywhere from preclinical validation through clinical trials. In some cases we may out-license or transfer drug candidates for clinical advancement by a partner, with the expectation of a greater share in the economics relative to the milestones and royalties we may secure for our core platform technology development licenses.
Current wording
•Develop our internal pipeline: We are in the process of selectively creating our own drug candidates and intend to advance them to value inflection points anywhere from preclinical validation through to clinical trials prior to out-licensing for further clinical advancement by a partner or other third party.
Previous wording
•Establish new partnerships: Our potential to grow revenue and long-term earnings will require us to successfully identify and establish drug creation arrangements with new partners.
Current wording
•Establish new partnerships: Our potential to grow revenue and long-term earnings will require us to successfully identify, establish and maintain collaborations with new and existing partners, including through drug creation partnerships and further clinical development of our internal programs for drug candidates.
Previous wording
•Successfully complete our drug creation activities and enter licensing arrangements with our partners: Our business model depends upon entering into licensing arrangements with our partners to advance the drug candidates which we generate through clinical development to commercialization. Both our ability to successfully complete drug creation activities to meet the needs of a partner, and the partner’s prioritization of the subject program, impact the likelihood and timing of any election by a partner to enter into a licensing arrangement. There is no assurance that a partner will elect to license.
Current wording
•Successfully complete our drug creation activities with partners and enter into licensing arrangements: Our business model relies upon entering into licensing arrangements with our partners to advance the drug candidates we generate through preclinical validation and clinical trials thru to commercialization. Both our ability to successfully complete drug creation activities to meet the needs of a partner, and the partner’s prioritization of the relevant program, impact the likelihood and timing of any election by a partner to enter into a follow-on licensing arrangement. There is no assurance that a partner will elect to license our technology for the development of any drug candidates.
Previous wording
•Our partners successfully developing and commercializing the drug candidates generated with our technology: Our business model is dependent on the eventual progression of biologic drug candidates discovered or initially developed utilizing our Integrated Drug Creation platform into clinical trials and commercialization. Given the nature of our relationships with our partners, we often do not fully control the progression, clinical development, regulatory strategy, public disclosure or eventual commercialization, if approved, of our partnered product candidates. As a result, our future success and our potential eligibility to receive milestone payments and royalties are significantly dependent on our partners’ efforts over which we have no control. The timing and scope of any approval that may be required by the U.S. Food and Drug Administration (FDA), or any other regulatory body, for drugs that are developed based on molecules discovered and/or manufactured using our Integrated Drug Creation platform technologies can significantly impact our results of operations and future performance.
Current wording
•Developing and commercializing the drug candidates generated with our proprietary Integrated Drug Creation technology: Our business model is dependent on the eventual progression of drug candidates discovered or initially developed utilizing our Integrated Drug Creation platform into clinical trials by us or our partners and through commercialization by our partners or other third parties. Given the nature of our relationships with our partners, we often do not fully control the progression, clinical development, regulatory strategy, public disclosure or eventual commercialization, if approved, of our partnered product candidates. As a result, our future success and our potential eligibility to receive milestone payments and royalties are significantly dependent on our partners’ efforts over which we have no control. The timing and scope of any approval that may be required by the U.S. Food and Drug Administration (FDA), or any other regulatory body, for drugs that are developed based on molecules discovered and/or manufactured using our Integrated Drug Creation platform technologies can significantly impact our results of operations and future performance.
Previous wording
•Continued significant investments in our research and development of new technologies and platform expansion: We are seeking to further refine and expand our platform and the scope of our capabilities, which may or may not be successful. This includes, but is not limited to, novel target identification, de novo discovery, incorporation of non-standard amino acids (Bionic protein creation), and application of artificial intelligence across our Integrated Drug Creation platform. We may also invest significantly in developing our own proprietary lead drug candidates and advancing them through preclinical, or later, validation. We expect to incur significant expenses to advance these research and development efforts or to invest in or acquire complementary technologies, but these efforts may not be successful.
Current wording
•Continued significant investments in our research and development of new technologies and platform technology expansion: We are seeking to further refine and expand our proprietary platform technology and the scope of our capabilities, which may or may not be successful. This includes, but is not limited to, novel target identification, de novo discovery, incorporation of non-standard amino acids (Bionic protein creation), and application of artificial intelligence across our Integrated Drug Creation platform. We may also invest significantly in developing our clinical trials. We expect to incur significant expenses to advance our discovery, research and development efforts or to invest in and/or acquire complementary technologies, but these efforts may not be successful.
Previous wording
•Drive commercial adoption of our Integrated Drug Creation platform capabilities: Driving the adoption of our Integrated Drug Creation platform across existing and new markets will require significant investment. We plan to further invest in research and development to support the expansion of our platform capabilities including new molecules to existing partners or help deliver our platform to new markets.
Current wording
•Drive commercial adoption of our proprietary Integrated Drug Creation platform capabilities: Driving the adoption of our Integrated Drug Creation platform across existing and new markets will require significant investment. We plan to further invest in research and development to support the expansion of our platform capabilities, including capabilities to discover and validate new drug candidates for existing partners or help expand the capabilities of our platform to support new markets.
Previous wording
(2) Active Programs represents drug creation programs that are subject to ongoing technology development activities intended to determine if the program can be pursued by our partner for future clinical development, as well as any program for which our partner obtains and maintains a license to our technology to advance the program after completion of the drug creation phase. There is no assurance, however, that our partners will advance any drug candidates that are currently the subject of Active Programs into further preclinical or clinical development or that our partners will elect to license our technologies upon completion of the drug creation phase in a timely manner, or at all. In light of the inherent risks and uncertainties associated with drug development, we anticipate that our partners may from time to time abandon or terminate the development of one or more drug candidates generated from our platform. As we are notified of such terminations, we will remove the subject programs from our Active Programs count.
Current wording
(2) Active Programs represents drug candidate creation programs that are subject to ongoing development activities intended to determine if the program can be pursued by our partner for future preclinical or clinical development, as well as any program for which our partner obtains and maintains a license to our technology to advance such program after completion of the drug creation phase. There is no assurance, however, that our partners will advance any drug candidates that are currently the subject of Active Programs into further preclinical or clinical development or that our partners will elect to license our technologies upon completion of the drug creation phase in a timely manner, or at all. In light of the inherent risks and uncertainties associated with drug development, we anticipate that our partners may from time to time abandon or terminate the development of one or more drug candidates generated from our platform. As we are notified of such terminations, we will remove the subject programs from our Active Programs count.
Previous wording
Our Integrated Drug Creation platform is primarily utilized in our partnerships for drug creation across indications using AI to simultaneously optimize multiple drug characteristics that may be important to development and therapeutic benefit. One of our Active Programs with an undisclosed partner is leveraging our platform capabilities to optimize pharmacokinetic properties for a Phase II candidate and one of our Active Programs with an undisclosed partner is leveraging our platform capabilities including our antibody library. We also have three Active Programs focused on our legacy model of developing production cell lines for drug candidates that our partners are developing. Two of these legacy cell line development Active Programs are preclinical and one is in Phase 3 clinical development (PhaseBio Pharmaceuticals’ drug candidate, bentracimab, assumed by SFJ Pharmaceuticals, Inc. in January 2023).
Current wording
Our proprietary Integrated Drug Creation platform is primarily utilized in our partnerships for drug candidate creation across diverse indications using AI to simultaneously optimize multiple drug characteristics that may be important to future development and/or therapeutic benefit. One of our Active Programs with an undisclosed partner is leveraging our proprietary Integrated Drug Creation platform to optimize pharmacokinetic properties for a Phase II candidate and one of our Active Programs with an undisclosed partner is leveraging our proprietary Integrated Drug Creation platform. We also have three Active Programs focused on our legacy model of developing production cell lines for drug candidates that our partners are developing. Two of these legacy cell line development Active Programs are in preclinical development and one is in Phase 3 clinical development (PhaseBio Pharmaceuticals’ drug candidate, Bentracimab, which was acquired by SFJ Pharmaceuticals, Inc. in January 2023).
Previous wording
Our biologics pipeline reflects our differentiated capabilities inde novo antibody creation, multi-parameteric lead optimization, and reverse immunology. We’re developing a diversified portfolio of programs with a focus on cytokine biology as we scale our Integrated Drug Creation platform and strive to impact millions of lives.
Current wording
Our internal pipeline reflects our differentiated capabilities inde novo antibody creation, multi-parameteric lead optimization, and reverse immunology. We are developing a diversified portfolio of programs with a focus on cytokine biology as we scale our Integrated Drug Creation platform and strive to impact millions of lives.
Previous wording
As of March 31, 2024, we have identified three wholly-owned internal asset programs focusing on cytokine biology as well as several undisclosed internal pipeline programs under evaluation.
Current wording
As of June 30, 2024, we have identified three wholly-owned internal pipeline programs focusing on cytokine biology, as well as several other undisclosed pipeline programs under evaluation.
Previous wording
We are aware of clinical stage assets targeting TL1A that are being developed by Merck, Roche and Sanofi. For purposes of comparing the anticipated attributes of ABS-101 to these competitive product candidates, we generated putative clinical competitor molecules and performed a head to head comparison against several potential ABS-101 molecules. In these preclinical studies, ABS-101 potential candidates exhibited properties consistent with a potentially superior product profile by demonstrating equal or superior potency data from multiple biophysical and cellular assays, in addition to improved developability properties. We believe these attributes support the program’s potential to create an efficacious candidate conducive to subcutaneous dosing. Furthermore, in vitro and preliminary in vivo PK studies confirm the potential for extended half-life, supporting the objective for significantly improved dosing intervals. While we are encouraged by these preclinical results, we cannot assure you that similar results will be obtained in clinical studies of ABS-101. Additionally, while we endeavored to create molecules with the same attributes as those of competitive product candidates under development, we cannot assure you that the molecules we created are similar or better than those being developed by our competitors, nor can we assure you that direct comparisons of our clinical product candidate to those of our competitors will produce similar results.
Current wording
We are aware of clinical stage assets targeting TL1A that are being developed by third parties, including Merck, Roche, and Sanofi. For purposes of comparing the potential clinical attributes of drug candidates in our ABS-101 program to certain of these other competitive clinical stage assets, we generated putative molecules and performed a head-to-head preclinical comparison against several of our drug candidates in our ABS-101 program. In these preclinical studies, ABS-101 candidates exhibited attributes consistent with a potentially superior product profile by demonstrating equal or superior potency data from multiple biophysical and cellular assays, in addition to improved developability properties. Further preclinical studies demonstrated ABS-101 candidates' abilities to bind both the TL1A monomer and trimer, which could potentially lead to differentiated clinical efficacy. We believe these attributes support the program’s potential to create an efficacious candidate conducive to subcutaneous dosing. Furthermore, in vitro and preliminary in vivo PK studies demonstrated the potential for extended half-life, supporting the objective for significantly improved dosing intervals. While we are encouraged by these preclinical results, we cannot assure you that similar results will be observed in clinical studies of ABS-101. Additionally, while we endeavored to create molecules with the same attributes as those of competitive product candidates under development, we cannot assure that the molecules we created are similar or better than those being developed by our competitors, nor can we assure that direct comparisons of our clinical product candidate to those of our competitors will produce similar results.
Previous wording
In February 2024, we initiated IND-enabling studies to further evaluate certain properties of ABS-101. Based on these IND-enabling studies, we expect to initiate Phase 1 clinical studies for ABS-101 in early 2025.
Current wording
In February 2024, we initiated IND-enabling studies to further evaluate certain properties of ABS-101. Based on these IND-enabling studies, we expect to initiate Phase 1 clinical studies for ABS-101 in early 2025, subject to clearance of an IND or equivalent regulatory filing.
Previous wording
We expect revenue to increase over time as we enter into additional drug creation partnership agreements. We expect revenue to increase over time as we grant licenses to our partners for the clinical and commercial use of intellectual property rights to the biological assets we create, and as the partners advance product candidates into and through clinical development and commercialization. We expect that our revenue will fluctuate from period to period due to the timing of executing additional partnerships, the uncertainty of the timing of milestone achievements and our dependence on the program decisions of our partners.
Current wording
We expect that our revenue will fluctuate from period to period due to, for example, the timing of executing additional partnerships, the contractual structure of future partnerships, the uncertainty of the timing of milestone achievements and dependence on our partners’ program-related decisions. We expect revenue to increase over time as we grant licenses to our partners for the clinical and commercial use of intellectual property rights to the biological assets we create, and as the partnered program product candidates advance into and through clinical development and commercialization.
Previous wording
Research and development expenses include the cost of materials, personnel-related costs (comprised of salaries, benefits and share-based compensation) for personnel performing research and development functions, consulting fees, equipment and allocated facility costs (including occupancy and information technology). These expenses are exclusive of depreciation and amortization. Research and development activities consist of continued development of our Integrated Drug Creation platform, internal pipeline, and drug creation for partners. We derive improvements to our platform from each type of activity. Research and development efforts apply to our platform broadly and across programs.
Current wording
Research and development expenses include the cost of materials, third-party vendor services, personnel-related costs (comprised of salaries, benefits and share-based compensation), consulting fees, equipment, certain information technology costs and allocated facility costs. These expenses are exclusive of depreciation and amortization. Research and development activities consist of continued development of our Integrated Drug Creation platform, internal pipeline, and drug creation for partners. We derive improvements to our platform from each type of activity. Research and development efforts apply to our platform broadly and across programs.
Previous wording
We expect research and development expenses to increase in absolute dollars over the long term as we enter into additional drug creation partnerships, continue to invest in platform enhancements, and develop and advance our internal asset pipeline.
Current wording
We expect research and development expenses to increase in absolute dollars over the long term as we develop and advance our internal asset pipeline, enter into additional drug creation partnerships, and continue to invest in platform enhancements.
Previous wording
Selling, general, and administrative expenses include personnel-related costs (comprised of salaries, benefits and share-based compensation) for executive, business development, alliance management, legal, finance, marketing and other administrative functions. Marketing and business development expenses include costs associated with attending conferences and all promotion efforts of our Integrated Drug Creation platform. Professional service expenses such as external legal expenses, accounting and tax service expenses, and other consultants, and allocated facilities costs (including occupancy and information technology) are also included within selling, general and administrative expenses. These expenses are exclusive of depreciation and amortization.
Current wording
Selling, general, and administrative expenses include personnel-related costs (comprised of salaries, benefits and share-based compensation) for executive, business development, legal, finance, human resources, information technology and other administrative functions. Business development expenses include costs associated with attending conferences and other promotion efforts of our Integrated Drug Creation platform. General and administrative expenses include certain professional service expenses such as, external legal, accounting, and other consultants, as well as certain information technology costs and allocated facility costs. These expenses are exclusive of depreciation and amortization.
Previous wording
We expect our selling costs to increase in absolute dollars as we continue to grow our business development efforts and increase marketing activities to drive awareness and adoption of our platform. We expect general and administrative expenses to continue to stabilize as we more effectively control costs associated with operating as a public company, including expenses related to complying with legal, accounting and regulatory requirements, maintaining compliance with exchange listing and requirements of the U.S. Securities and Exchange Commission (SEC), director and officer insurance premiums, and engaging in investor relations activities. We expect these expenses to vary from period to period as a percentage of revenue in the near term, and to decrease as a percentage of revenue in the long term.
Current wording
We expect our selling costs to increase in absolute dollars as we continue to grow our business development efforts to drive awareness and adoption of our platform. As we grow our operations, we expect personnel-related costs to increase in absolute dollars and we expect to actively manage other general and administrative expenses. We expect these expenses to vary from period to period as a percentage of revenue in the near term, and to decrease as a percentage of revenue in the long term.
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 the three months ended March 31, 2024 and 2023 (In thousands, except for percentages):
Current wording
The following table summarizes our results of operations for the three and six months ended June 30, 2024 and 2023 (In thousands, except for percentages):
Previous wording
Technology development revenue decreased by $0.4 million, or 29%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, driven by a combination of overall program progress, the timing of project-based milestones achieved, and the mix of ongoing programs activity.
Current wording
Technology development revenue decreased by $2.1 million, or 62% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and decreased by $2.5 million, or 53%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, driven by a combination of overall program progress, the timing of project-based milestones achieved, and the mix of ongoing program activity.
Previous wording
The following table summarizes our operating expenses for the three months ended March 31, 2024 and 2023 (In thousands, except for percentages):
Current wording
The following table summarizes our operating expenses for the three and six months ended June 30, 2024 and 2023 (In thousands, except for percentages):
Previous wording
Selling, general, and administrative expenses decreased by $0.8 million, or 9%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was primarily attributable to a decrease in personnel costs of $0.3 million, decreased insurance and other administrative costs of $1.1 million, offset by a $0.5 million increase in stock-based compensation.
Current wording
Selling, general, and administrative expenses decreased by $0.1 million, or 1%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily attributable to decreased insurance and other administrative costs of $1.0 million, a decrease in personnel costs of $0.6 million, offset by an increase in stock-based compensation of $1.6 million.
Previous wording
Research and development expenses decreased by $0.4 million, or 3%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was primarily attributable to a decrease in personnel costs of $0.8 million, decreased administrative costs of $0.1 million, offset by a $0.5 million increase in stock-based compensation.
Current wording
Selling, general, and administrative expenses decreased by $0.9 million, or 5%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily attributable to decreased insurance and other administrative costs of $2.1 million, a decrease in personnel costs of $0.9 million, offset by a $2.0 million increase in stock-based compensation.
Previous wording
Depreciation and amortization expense decreased by $0.1 million, or 3%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, remaining relatively consistent between periods.
Current wording
Depreciation and amortization expense decreased by $0.1 million, or 3% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and decreased by $0.2 million, or 3%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, remaining relatively consistent between periods.
Previous wording
The following table summarizes our other income (expense) for the three months ended March 31, 2024 and 2023 (In thousands, except for percentages):
Current wording
The following table summarizes our other income (expense) for the three and six months ended June 30, 2024 and 2023 (In thousands, except for percentages):
Previous wording
Interest expense was $0.2 million for the three months ended March 31, 2024, compared to $0.3 million for the three months ended March 31, 2023, representing a decrease of $0.1 million, or 45%, primarily attributable to decreased finance lease and long-term debt obligations.
Current wording
Interest expense was $0.2 million for the three months ended June 30, 2024, compared to $0.3 million for the three months ended June 30, 2023, representing a decrease of $0.1 million, or 41% and $0.3 million for the six months ended June 30, 2024, compared to $0.6 million for the six months ended June 30, 2023, representing a decrease of $0.3 million, or 44%, primarily attributable to decreased finance lease and long-term debt obligations.
Previous wording
Other income, net, was $1.7 million for the three months ended March 31, 2024 compared to $1.5 million for the three months ended March 31, 2023, representing an increase of approximately $0.3 million, or 17%, primarily attributable to increases in investment income from cash, cash equivalents and short-term investments.
Current wording
Other income, net, was $2.1 million for the three months ended June 30, 2024, compared to $1.6 million for the three months ended June 30, 2023, representing an increase of $0.5 million, or 34% and $3.8 million for the six months ended June 30, 2024 compared to $3.0 million for the six months ended June 30, 2023, representing an increase of approximately $0.8 million, or 26%, primarily attributable to increases in investment income from cash, cash equivalents and short-term investments due to higher balances and interest rates.
Previous wording
As of March 31, 2024, we had $161.5 million of cash, cash equivalents and short-term investments.
Current wording
As of June 30, 2024, we had $145.2 million of cash, cash equivalents and short-term investments.
Previous wording
We have incurred net operating losses since inception. As of March 31, 2024, our accumulated deficit was $428.5 million. To date, we have funded operations through issuances and sales of equity securities and debt, in addition to revenue generated from our drug creation agreements. We believe that our cash, cash equivalents and short-term investments will be sufficient to meet our operating expenses, working capital and capital expenditure needs over at least the next 12 months following the date of this filing.
Current wording
We have incurred net operating losses since inception. As of June 30, 2024, our accumulated deficit was $453.2 million. To date, we have funded operations through issuances and sales of equity securities and debt, in addition to revenue generated from our drug creation agreements. We believe that our cash, cash equivalents and short-term investments will be sufficient to meet our operating expenses, working capital and capital expenditure needs over at least the next 12 months following the date of this filing.
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