Ovid Therapeutics Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
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.
Sep 30, 2024 · Filed Nov 12, 2024
OVID$2.85+10.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001628280-24-036860
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001628280-24-046868
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 99 previous paragraphs and 106 current paragraphs.
66 unchanged; 24 reworded; 14 added; 9 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 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 (14)
Current report
We are a biopharmaceutical company committed to developing medicines for brain conditions with significant unmet need in a manner that is mechanistically driven, scientifically rigorous and patient focused. Our differentiated pipeline of potential small molecule medicines has produced four unique programs to date, three of which we are actively developing, and the fourth, which we co-developed, was subsequently repurchased by Takeda Company Limited (“Takeda”) in 2021. Central to our strategy is identifying and developing differentiated mechanisms of action to interdict unaddressed biological targets in the brain that are fundamental to disease pathology. This strategy has achieved a pipeline inclusive of: OV329, a potential best-in-class next generation GABA aminotransferase inhibitor; a library of direct activators of the potassium chloride co-transporter 2 (KCC2), including the first candidate, OV350; and OV888/GV101, a rho-associated coiled-coil containing protein kinase 2 (ROCK2) inhibitor. This pipeline was curated using an integrated and disciplined approach to business development, research, and clinical development. The development programs in our pipeline act upon factors modulating neuronal hyperexcitability, neuroinflammation and neurovascular anomalies, which we believe underlie seizures, psychoses and other neurological and neurodegenerative conditions.
Current report
For each of our programs we focus on generating data using relevant disease models and thorough toxicology studies to build a replicable and scalable approach to develop small molecule candidates, which begins with conducting animal disease models and toxicology studies in the preclinic to build convincing safety, mechanistic and therapeutic evidence before moving into human studies. While the therapeutic potential of the unique mechanisms of action within each of our pipeline programs is quite broad, we typically seek to implement cost-efficient and accelerated proof-of-concept programs in rare disease populations. This approach provides evidence and de-risking information prior to moving into larger population indications that would require costlier trials. When possible and scientifically relevant, we implement assessments of target engagement and biomarkers into our development programs. Our cohesive focus in brain disorders caused by hyper-excitabilty, neuro-inflammation and neuro-vascular dysfunction reinforces our belief that we can develop and produce multiple novel medicines, scale our infrastructure, and thereby succeed in our mission.
Current report
In December 2022, we initiated a Phase 1 SAD/MAD study in healthy volunteers for OV329, a next-generation GABA-aminotransferase inhibitor. Our development of OV329 seeks to achieve a profile that reduces neuronal hyperexcitability with less sedation and without ocular changes that are associated with an older drug in the class, vigabatrin. This profile, supported by our preclinical characterization, suggests that OV329 is more potent, delivers synaptic and extrasynaptic inhibition, and has a lasting pharmacodynamic effect with rapid tissue clearance.
Current report
We are executing the multiple ascending dose portion of the Phase 1 study as planned and no serious adverse events have been observed. Based upon supportive human safety data to date, we will explore with regulators adding additional cohorts to increase dosing opportunities for future Phase 2 programs. We anticipate this will delay topline data until 2025, and we will provide more detailed timelines following discussions with regulators. When completed, the Phase 1 results should include results on safety, tolerability, and two biomarkers that may provide a signal for target engagement and clinical effect, using magnetic resonance spectroscopy and transcranial magnetic stimulation, respectively.
Current report
To evaluate OV329’s profile compared to vigabatrin, a first-generation GABA-AT inhibitor, we conducted additional animal experiments to evaluate the risk of drug accumulation in the eye and causing retinal cell dysregulation. At the Epilepsy Pipeline Conference in September 2024, we presented results from an animal study demonstrating that OV329 did not accumulate in animal eyes in contrast with vigabatrin. OV329 was present in the brain plasma of mice and then rapidly cleared the tissue and remained undetectable in the retina, eye, and brain. In contrast, vigabatrin was demonstrated to accumulate in the eye, retina and brain in less than 48 hours, which is consistent with previously published independent research. The full results from this head-to-head study will be presented at the American Epilepsy Society conference in December 2024.
Current report
KCC2 direct activator library and OV350
Current report
We are developing a library of direct activators of the potassium chloride co-transporter 2 (KCC2), a biologic target that is fundamental to hyper-excitabilty and which is implicated in a broad range of neurological, neuropsychiatric, neurodevelopmental and neurodegenerative indications. The library contains multiple compounds, which have unique therapeutic characteristics and are amenable for oral, intramuscular and intravenous formulations to address clinical indications across the care continuum. We are conducting multiple non-clinical studies to characterize the therapeutic potential and safety of these compounds and intend to rapidly advance the most promising candidates successively into human studies. We anticipate the library will generate multiple clinical development programs in the next 2-3 years.
Current report
We expect to submit a regulatory application for a Phase 1 trial of the first candidate from the library, OV350, before year end 2024, and we anticipate initiating first-in-human studies for this class of molecule in the first quarter of 2025. We intend to evaluate the safety, tolerability and pharmacokinetic parameters of an IV formulation of OV350 in healthy human volunteers. In preclinical and animal disease models, OV350 has demonstrated anti-psychotic and anticonvulsant effects, indicating it may have broad therapeutic utility.
Current report
ROCK2 inhibition programs with Graviton Bioscience
Current report
However, following the recent completion of competitor trials in CCM, and after discussions with key stakeholders, together with Graviton, we are pausing the initiation of the Phase 2 proof-of-concept study of OV888/GV101 in CCM. With Graviton, we received regulatory clearance to initiate a Phase 2 program, but we will take a strategic pause to evaluate clinical design learnings emerging from competitor Phase 2 programs. We will seek to optimize future development approaches with the benefit of further insights on study duration, enrichment strategies, endpoints, and time-to-event measurements. We continue to pursue additional formulations of OV888/GV101 for undisclosed cerebral vascular conditions with high unmet need.
Current report
Soticlestat, a cholesterol 24-hydroxylase inhibitor
Current report
General and administrative expenses were $5.5 million and $6.8 million for the three months ended September 30, 2024 and 2023, respectively. The decrease in general and administrative expenses is primarily due to the organizational restructuring executed during the second quarter of 2024, inclusive of payroll and related expenses as well as other cost reductions.
Current report
Other income (expense), net for the three months ended September 30, 2024 and 2023 was a $0.8 million loss and a $0.8 million gain, respectively. The decrease of $1.6 million was primarily due to an unrealized loss of $1.8 million due to a fraudulent funds transfer, offset by unrealized gain (loss) on long-term equity investments and interest earned and accretion of discount on marketable securities.
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Removed paragraphs (9)
Previous report
Over time, we have built a replicable and scalable approach to develop small molecule candidates, which begins with conducting animal disease models and toxicology studies in the pre-clinic to build evidence and confidence before moving into the clinic. Initially, we are pursuing therapeutic assets for rare epilepsies and seizure disorders as they can leverage cost-efficient and accelerated development programs and they can be evaluated with concrete and measurable endpoints such as seizures and electroencephalogram (“EEG”) readings. In addition to seizures, if successfully developed and marketed, we intend to explore our pipeline assets for broader neurologic indications caused by neuronal hyperexcitability, as applicable. Our cohesive focus in rare epilepsies and seizures reinforces our belief that we can develop and produce multiple novel medicines, scale our infrastructure, and thereby succeed in our mission.
Previous report
We are also developing a portfolio of direct activators of the potassium chloride co-transporter 2 (KCC2) for the potential treatment of seizures and other neurological indications, including OV350. We are conducting multiple non-clinical studies to characterize the therapeutic potential of direct activation of the KCC2 from our library of compounds, which is a biological target implicated in many neurological conditions including seizures. An IV formulation of OV350 is progressing toward anticipated regulatory filings or first-in-human studies in the second half of 2024. In October 2023, we also presented at our R&D Day animal studies that validate OV350’s potential anti-psychotic properties. We believe non-epilepsy indications may represent future development collaboration opportunities.
Previous report
Recent Developments
Previous report
June 2024 Organizational Restructuring
Previous report
On June 28, 2024, we announced a reduction of our workforce to prioritize our programs and extend our cash runway. We reduced our workforce by 17 people, or approximately 43% of our previous headcount. The organizational restructuring was effective as of July 11, 2024. All employees affected by the organizational restructuring were eligible to receive, among other things, severance payments and the continuation of group health insurance coverage for a specified time period post-termination, contingent upon such employee’s execution of a general release of claims against the Company.
Previous report
We estimate that we will incur approximately $3.7 million in charges related to the organizational restructuring, which represents cash expenditures for severance and notice period payments, benefits and other related costs. We expect that the execution of the organizational restructuring will be substantially completed by the end of the third quarter of 2024 and that the majority of the cash payments related to the organizational restructuring will be substantially completed by the end of the second quarter of 2025.
Previous report
General and administrative expenses were $8.1 million and $8.2 million for the three months ended June 30, 2024 and 2023, respectively. Costs of the organizational restructuring of approximately $1.8 million were recognized during the three months ended June 30, 2024, but will be paid over an extended period. Similar severance costs of $1.0 million were also recognized in the same period in 2023.
Previous report
Comparison of the Six Months Ended June 30, 2024 and 2023
Previous report
Other income (expense), net for the six months ended June 30, 2024 results from unrealized gain (loss) on long-term equity investments and interest earned and accretion of discount on marketable securities. Additionally, other income of $29.0 million was recognized during the period relating to an adjustment to the royalty monetization liability under the Ligand Agreement, resulting from our reassessment of certain assumptions underlying the valuation of the royalty monetization liability, resulting from Takeda’s reported soticlestat Phase 3 study results. Other income, net for the six months ended June 30, 2024 was $34.8 million compared to $3.3 million for the same period in 2023. Aside from the adjustment to the royalty monetization liability, the increase between the periods is primarily due to net unrealized gains recorded on the long-term equity investments.
Reworded paragraphs (24)
Previous wording
We are a biopharmaceutical company committed to developing medicines that transform the lives of people with certain epilepsies and brain conditions with seizure symptoms in a manner that is scientifically driven and patient focused. We have set out to be a leader in the field of certain epilepsies and intractable neurological diseases with seizure symptoms. Our differentiated pipeline of potential small molecule medicines has produced four unique anti-seizure programs to date, three of which we are actively developing, and the fourth, which we co-developed, was subsequently repurchased by Takeda Company Limited (“Takeda”) in 2021. This pipeline was curated using an integrated and disciplined approach to business development, research, and clinical development. All of the programs in our pipeline act upon either extrinsic or intrinsic factors modulating neuronal hyperexcitability, which we believe underlies seizures and other neurological conditions. Our management team has substantial understanding of rare disease and neurological conditions gained from the management team’s collective experience and contributions to the development and launch of more than 25 approved medicines in their respective careers prior to joining Ovid. Such experience includes many approved anti-seizure medicines. Our knowledge of the underlying biologic targets driving hyperexcitability and the pathology of refractory epilepsies has produced clinical-stage development program. Two of our three programs are in clinical trials. We expect to submit an investigational new drug (“IND”) application, or the equivalent in jurisdictions outside of the U.S., to begin clinical trials for the third program in the second half of 2024.
Current wording
Our management team has substantial understanding of neurological conditions, drug development and commercialization gained from collective experience and contributions to the development and launch of more than 25 approved medicines in their respective careers prior to joining Ovid. These launches include many approved medicines for disorders of the brain. Our efforts have produced multiple clinical-stage development programs. Two of our three active programs, OV888/GV101 and OV329, have advanced into human studies. We expect to submit an investigational new drug (“IND”) application, or the equivalent in jurisdictions outside of the U.S., to begin clinical trials for the third program, OV350, in the fourth quarter of 2024.
Previous wording
Since our inception in April 2014, we have devoted substantially all of our efforts to organizing and planning our business, building our management and technical team, acquiring operating assets and raising capital. We have historically funded our business primarily through the sale of our capital stock. Through June 30, 2024, we have raised net proceeds of $275.4 million from the sale of our capital stock. We have also, in previous periods, generated revenue through license and collaboration agreements, including $196.0 million from our royalty, license and termination agreement (“RLT Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”) and $30.0 million from our purchase and sale agreement (“Ligand Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”). As of June 30, 2024, we had $77.0 million in cash, cash equivalents and marketable securities and an accumulated deficit of $281.0 million.
Current wording
Since our inception in April 2014, we have devoted substantially all of our efforts to organizing and planning our business, building our management and technical team, acquiring operating assets and raising capital. We have historically funded our business primarily through the sale of our capital stock. Through September 30, 2024, we have raised net proceeds of $275.4 million from the sale of our capital stock. We have also, in previous periods, generated revenue through license and collaboration agreements, including $196.0 million from our royalty, license and termination agreement (“RLT Agreement”) with Takeda Pharmaceutical Company Limited (“Takeda”) and $30.0 million from our purchase and sale agreement (“Ligand Agreement”) with Ligand Pharmaceuticals Incorporated (“Ligand”). As of September 30, 2024, we had $62.7 million in cash, cash equivalents and marketable securities and an accumulated deficit of $295.0 million.
Previous wording
In December 2022, we initiated a Phase 1 study for OV329, a next-generation GABA-aminotransferase inhibitor, in healthy volunteers. That study is continuing to dose-escalate in the single-ascending dose cohorts and we anticipate initiating amultiple-ascending dose study. No serious adverse events have been observed in the Phase 1 study thus far. At our R&D Day in October 2023, we shared preclinical data demonstrating OV329 elicits an EEG response which is a pharmacodynamic marker of anti-convulsant activity. We subsequently guided that we will be adding a transcranial magnetic stimulation to the Phase 1 study to serve as a second biomarker for efficacy in addition to measuring target engagement via magnetic resonance spectroscopy. The current Phase 1 is expected to be completed in the second half of 2024. Additionally, we announced plans to develop an intravenous (“IV”) formulation of OV329 for potential use in acute seizures based upon emerging evidence that GABA-AT inhibition may be effective in the treatment of status epilepticus. In June 2024, we decided to pause the development of the IV formulation of OV329 to focus on other preclinical and clinical programs.
Current wording
OV329, a next-generation GABA-aminotransferase inhibitor
Previous wording
In May 2023, we in-licensed OV888/GV101 and a library of highly selective Rho-associated coiled-coil containing protein kinase 2 (ROCK2) inhibitors from Graviton Bioscience Corporation(“Graviton”)and entered into a research and collaboration agreement with Graviton. Under the collaboration, Graviton is responsible for developing the lead program through Phase 2 development and we will then assume responsibility for Phase 3 development and commercialization. The lead program from this collaboration, OV888/GV101, is formulated as a hard gel capsule, which we expect to be the future clinical formulation. Together with Graviton, we announced positive topline data from a Phase 1 multiple-ascending dose study of OV888/GV101 on July 1, 2024. Ovid and Graviton intend to initiate a signal-finding trial in people living with cerebral cavernous malformations in the second half of 2024.
Current wording
In May 2023, we in-licensed OV888/GV101 and a library of highly selective Rho-associated coiled-coil containing protein kinase 2 (ROCK2) inhibitors from Graviton Bioscience Corporation (“Graviton”) and entered into a research and collaboration agreement with Graviton. Under the collaboration, Graviton is responsible for developing the programs through Phase 2 development and we will then assume responsibility for Phase 3 development and commercialization. The first program from this collaboration is OV888/GV101, a hard gel capsule. With Graviton, we announced positive topline data from a Phase 1 multiple-ascending dose study of OV888/GV101 on July 1, 2024 and originally intended to initiate a signal-finding trial in people living with cerebral cavernous malformations in the second half of 2024.
Previous wording
In 2021, we sold our rights to soticlestat to Takeda, who studied it in two pivotal Phase 3 trials in Lennox-Gastaut syndrome and Dravet syndrome. On June 17, 2024, Takeda announced topline results of those trials. Given that the two Phase 3 Takeda trials evaluating soticlestat for the treatment of Dravet and Lennox-Gastaut syndromes did not meet their primary endpoints, it is uncertain whether Takeda will continue to progress, or elect to terminate the development of soticlestat as contemplated by the RLT Agreement, in which case we may not receive some or all of the royalty and milestone payments under the RLT Agreement. Takeda has publicly announced plans to engage with regulatory authorities to discuss the totality of the data generated by the study in Dravet syndrome to determine next steps.
Current wording
In 2021, we sold our rights to soticlestat to Takeda, who studied it in two pivotal Phase 3 trials in Lennox-Gastaut syndrome and Dravet syndrome. In June 2024, Takeda announced the two Phase 3 Takeda trials evaluating soticlestat for the treatment of Dravet and Lennox-Gastaut syndromes did not meet their primary endpoints. It is uncertain whether Takeda will continue to progress or elect to terminate the development of soticlestat as contemplated by the RLT Agreement, in which case we may not receive some or all of the royalty and milestone payments under the RLT Agreement. Takeda has publicly announced plans to engage with regulatory authorities to discuss the totality of the data generated by the study in Dravet syndrome to determine next steps.
Previous wording
The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with bank failures, public health crises and global geopolitical tensions, like the ongoing war between Russia and Ukraine and the war in Israel, may have a material adverse effect on our business, financial condition, results of operations and growth prospects. The resulting high inflation rates may materially affect our business and corresponding financial position and cash flows. Inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results. Elevated interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Furthermore, economic conditions have produced downward pressure on share prices. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain high or begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, global geopolitical tensions as a result of the ongoing war between Russia and Ukraine and the war in Israel, worsening global macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital resources.
Current wording
The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with bank failures, public health crises and global geopolitical tensions, like the ongoing war between Russia and Ukraine and the war involving Israel, may have a material adverse effect on our business, financial condition, results of operations and growth prospects. The resulting high inflation rates may materially affect our business and corresponding financial position and cash flows. Inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results. Elevated interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Furthermore, economic conditions have produced downward pressure on share prices. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates remain high or begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, global geopolitical tensions as a result of the ongoing war between Russia and Ukraine and the war involving
Previous wording
Other income (expense), net primarily consists of unrealized gains (losses) on long-term equity investments, interest income and accretion of discount on investments in marketable securities, and change in fair value of royalty monetization liability.
Current wording
Other income (expense), net primarily consists of interest income and accretion of discount on investments in marketable securities, unrealized gains (losses) on long-term equity investments, an unrealized loss due to a fraudulent funds transfer and change in fair value of royalty monetization liability.
Previous wording
Revenue of $169,000 and $75,000 was recorded in the three months ended June 30, 2024 and 2023, respectively, which consisted of royalties on net sales pursuant to an out-licensing agreement.
Current wording
Revenue of $173,000 and $109,000 was recorded in the three months ended September 30, 2024 and 2023, respectively, which consisted of royalties on net sales pursuant to an out-licensing agreement.
Previous wording
During the three months ended June 30, 2024, research and development expenses were $12.6 million, compared to $6.0 million for the same period in 2023. The increase of $6.6 million primarily relates to $4.0 million in expenses associated with the acceleration of preclinical and clinical research and development in OV329 and OV888/GV101 as well as costs associated with the organizational restructuring in June 2024. Payroll and payroll-related expenses of the organizational restructuring of $1.6 million were recognized during the three months ended June 30, 2024, but will be paid over an extended period.
Current wording
During the three months ended September 30, 2024, research and development expenses were $7.9 million, compared to $5.3 million for the same period in 2023. The increase of $2.5 million primarily relates to expenses associated with the acceleration of preclinical and clinical research and development in OV350 and OV888/GV101.
Previous wording
Revenue of $317,000 was generated in the six months ended June 30, 2024, compared to revenue of $141,000 recognized in the same period in 2023. Revenue in both periods consisted of royalties on net sales pursuant to an out-licensing agreement.
Current wording
Revenue of $490,000 was generated in the nine months ended September 30, 2024, compared to revenue of $250,000 recognized in the same period in 2023. Revenue in both periods consisted of royalties on net sales pursuant to an out-licensing agreement.
Previous wording
During the six months ended June 30, 2024, research and development expenses were $23.0 million compared to $12.6 million for the same period in 2023. The increase of $10.4 million primarily relates to $8.8 million in expenses associated with the acceleration of preclinical and clinical research and development in OV329 and OV888/GV101 as well as costs associated with the organizational restructuring announced in June 2024. Payroll and payroll related costs of the organizational restructuring of $1.6 million were recognized during the three months ended June 30, 2024, but will be paid over an extended period.
Current wording
During the nine months ended September 30, 2024, research and development expenses were $30.8 million compared to $17.9 million for the same period in 2023. The increase of $12.9 million primarily relates to $10.7 million in expenses associated with the acceleration of preclinical and clinical research and development in OV329, OV350 and OV888/GV101 as well as costs associated with the organizational restructuring announced in June 2024. Payroll and payroll related costs of the organizational restructuring of $1.7 million were recognized during the nine months ended September 30, 2024, but will be paid over an extended period.
Previous wording
General and administrative expenses were $15.3 million for the six months ended June 30, 2024 compared to $16.6 million for the same period in 2023. The decrease of $1.3 million was primarily due to various cost reduction strategies during the period. Additionally, costs of the organizational restructuring of approximately $1.8 million were recognized during the three months ended June 30, 2024, but will be paid over an extended period.
Current wording
General and administrative expenses were $20.8 million for the nine months ended September 30, 2024 compared to $23.4 million for the same period in 2023. The decrease of $2.6 million was primarily due to reduced headcount and other cost reduction strategies during the period. Costs of the organizational restructuring of $2.0 million were recognized during the nine months ended September 30, 2024, but will be paid over an extended period.
Previous wording
Other income (expense), net for the three months ended June 30, 2024 and 2023 includes unrealized gain (loss) on long-term equity investments and interest earned and accretion of discount on marketable securities. Additionally, other income of $29.0 million was recognized during the period relating to an adjustment in fair value of the royalty monetization liability under the Ligand Agreement, resulting from our reassessment of certain assumptions underlying the valuation of the royalty monetization liability due to Takeda’s reported soticlestat Phase 3 study results. Other income (expense), net for the three months ended June 30, 2024 and 2023 was $29.0 million and $1.8 million, respectively.
Current wording
Other income (expense), net for the nine months ended September 30, 2024 was $34.0 million compared to $4.1 million for the same period in 2023. The increase of $29.9 million was primarily due to other income of $29.0 million that was recognized in June 2024 relating to an adjustment to the royalty monetization liability under the Ligand Agreement. The remainder of the increase resulted from unrealized gain (loss) on long-term equity investments and interest earned and accretion of discount on marketable securities, offset by an unrealized loss due to a fraudulent funds transfer.
Previous wording
As of June 30, 2024, we had total cash, cash equivalents and marketable securities of $77.0 million. We believe that our cash, cash equivalents and marketable securities as of June 30, 2024 will fund our projected operating expenses and capital expenditure requirements for at least 12 months from the issuance of this Quarterly Report on Form 10-Q.
Current wording
As of September 30, 2024, we had total cash, cash equivalents and marketable securities of $62.7 million. We believe that our cash, cash equivalents and marketable securities as of September 30, 2024 will fund our projected operating expenses and capital expenditure requirements for at least 12 months from the issuance of this Quarterly Report on Form 10-Q.
Previous wording
Similar to other development-stage biotechnology companies, we have generated limited revenue, which has been through various license and collaboration agreements, and have financed our operations primarily through the sale of equity securities. We have historically incurred losses and experienced negative operating cash flows for most periods since our inception and anticipate that we will incur losses and experience negative operating cash flows in the future. We recorded net income of $8.5 million (due to an adjustment to the royalty monetization liability under the Ligand Agreement) and net loss of $12.4 million for the three months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, we had an accumulated deficit of $281.0 million and working capital of $66.8 million.
Current wording
Similar to other development-stage biotechnology companies, we have generated limited revenue, which has been through various license and collaboration agreements, and have financed our operations primarily through the sale of equity securities. We have historically incurred losses and experienced negative operating cash flows for most periods since our inception and anticipate that we will incur losses and experience negative operating cash flows in the future. We recorded net losses of $14.0 million and $11.3 million for the three months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $295.0 million and working capital of $54.2 million.
Previous wording
As of June 30, 2024, we had no long-term debt and no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancellable, purchase order basis. We cannot estimate whether we will receive or the timing of any potential contingent payments upon the achievement by us of clinical, regulatory and commercial events, as applicable. In addition, we cannot estimate the timing of any potential royalty payments that we may be required to make under license agreements we have entered into with various entities pursuant to which we have in-licensed certain intellectual property as contractual obligations or commitments, including agreements with AstraZeneca and Northwestern. Pursuant to these license agreements, we have agreed to make milestone payments up to an aggregate of $279.3 million upon the achievement of certain development, regulatory and sales milestones. We excluded these contingent payments from the condensed consolidated financial statements, given that the timing, probability, and amount, if any, of such payments cannot be reasonably estimated at this time.
Current wording
As of September 30, 2024, we had no long-term debt and no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancellable, purchase order basis. We cannot estimate whether we will receive or the timing of any potential contingent payments upon the achievement by us of clinical, regulatory and commercial events, as applicable. In addition, we cannot estimate the timing of any potential royalty payments that we may be required to make under license agreements we have entered into with various entities pursuant to which we have in-licensed certain intellectual property as contractual obligations or commitments, including agreements with AstraZeneca and Northwestern. Pursuant to these license agreements, we have agreed to make milestone payments up to an aggregate of
Previous wording
In September 2021, we entered into a 10-year lease agreement for our corporate headquarters with a term commencing March 10, 2022, for approximately 19,000 square feet of office space at Hudson Commons in New York, New York. The lease provides for monthly rental payments over the lease term. The base rent under the lease is currently $2.3 million per year. Rent payments commenced January 10, 2023 and will continue for 10 years following the rent commencement date. We issued a letter of credit in the amount of $1.9 million in association with the execution of the lease agreement, which is reflected as restricted cash on our condensed consolidated balance sheets. Payment obligations under the lease agreement include approximately $2.3 million in the 12 months subsequent to June 30, 2024 and approximately $20.5 million over the remaining term of the agreement. For additional information see Note 5 to our condensed consolidated financial statements under the heading “Leases.”
Current wording
In September 2021, we entered into a 10-year lease agreement for our corporate headquarters with a term commencing March 10, 2022, for approximately 19,000 square feet of office space at Hudson Commons in New York, New York. The lease provides for monthly rental payments over the lease term. The base rent under the lease is currently $2.3 million per year. Rent payments commenced January 10, 2023 and will continue for 10 years following the rent commencement date. We issued a letter of credit in the amount of $1.9 million in association with the execution of the lease agreement, which is reflected as restricted cash on our condensed consolidated balance sheets. Payment obligations under the lease agreement include $2.3 million in the 12 months subsequent to September 30, 2024 and $19.9 million over the remaining term of the agreement. For additional information see Note 5 to our condensed consolidated financial statements under the heading “Leases.”
Previous wording
We have no products approved for commercial sale and have not generated any revenue from product sales to date. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings and additional funding from license and collaboration arrangements. Except for any obligations of our collaborators to reimburse us for research and development expenses or to make milestone or royalty payments under our agreements with them, we will not have any committed external source of liquidity. To the extent that we raise additional capital through future equity offerings or debt financings, ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. There can be no assurance that such financings will be obtained on terms acceptable to us, if at all. Additionally, inflation rates have increased recently to levels not seen in decades, contributing to the ongoing economic slowdown. Increased inflation may result in increased operating costs (including labor costs) and may affect our operating budgets. In response to concerns about inflation, the U.S. Federal Reserve has raised, and may further raise, interest rates. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. If the disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ability to pursue our business strategy. If we raise additional funds through collaborations, strategic alliances or licensing agreements with third parties for one or more of our current or future drug candidates, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or to grant licenses on terms that may not be favorable to us. Our failure to raise capital as and when needed would have a material adverse effect on our financial condition and our ability to pursue our business strategy. See “Risk Factors” for additional risks associated with our capital requirements.
Current wording
We have no products approved for commercial sale and have not generated any revenue from product sales to date. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings and additional funding from license and collaboration arrangements. Except for any obligations of our collaborators to reimburse us for research and development expenses or to make milestone or royalty payments under our agreements with them, we will not have any committed external source of liquidity. To the extent that we raise additional capital through future equity offerings or debt financings, ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. There can be no assurance that such financings will be obtained on terms acceptable to us, if at all. Additionally, increased inflation rates may result in greater operating costs (including labor costs) and may affect our operating budgets. In response to concerns about inflation, the U.S. Federal Reserve has raised, and may further raise, interest rates. Increases in interest rates, or a delay in interest rate reductions, especially if coupled with a significant change in government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks. If the disruptions and slowdown deepen or persist, we may not be able to access additional capital on favorable terms, or at all, which could in the future negatively affect our ability to pursue our business strategy. If we raise additional funds through collaborations, strategic alliances or licensing agreements with third parties for one or more of our current or future drug candidates, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or to grant licenses on terms that may not be favorable to us. Our failure to raise capital as and when needed would have a material adverse effect on our financial condition and our ability to pursue our business strategy. See “Risk Factors” for additional risks associated with our capital requirements.
Previous wording
While we expect that the organizational restructuring and the majority of the related cash payments will be substantially completed by the second quarter of 2025, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the organizational restructuring. Additionally, we may not achieve the expected benefits of these cost reduction measures and other cost reduction plans on the anticipated timeline, or at all, which could otherwise accelerate our liquidity needs and could force us to further curtail or suspend our operations.
Current wording
While we expect that the organizational restructuring in June 2024 and a majority of the related cash payments will be substantially completed by the second quarter of 2025, we may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the organizational restructuring. Additionally, we may not achieve the expected benefits of these cost reduction measures and other cost reduction plans on the anticipated timeline, or at all, which could otherwise accelerate our liquidity needs and could force us to further curtail or suspend our operations.
Previous wording
In November 2023, we filed a shelf registration statement on Form S-3 (Registration No. 333-275307) (the “S-3 Registration Statement”) to replace our prior registration statement that was set to expire. The S-3 Registration Statement allows us to sell up to an aggregate of $250.0 million of our common stock, preferred stock, debt securities and/or warrants, which includes a prospectus covering the issuance and sale of up to $75.0 million of common stock pursuant to an at-the-market (“ATM”) offering program. As of June 30, 2024, we had $250.0 million available under our S-3 Registration Statement, including $75.0 million available pursuant to our ATM program.
Current wording
In November 2023, we filed a shelf registration statement on Form S-3 (Registration No. 333-275307) (the “S-3 Registration Statement”) that allows us to sell up to an aggregate of $250.0 million of our common stock, preferred stock, debt securities and/or warrants, which includes a prospectus covering the issuance and sale of up to $75.0 million of common stock pursuant to an at-the-market (“ATM”) offering program. As of September 30, 2024, we had $250.0 million available under our S-3 Registration Statement, including $75.0 million available pursuant to our ATM program.
Previous wording
Net cash used in operating activities was $30.9 million for the six months ended June 30, 2024, which consisted of net loss of $3.2 million, primarily due to a non-cash fair value adjustment recorded to the royalty monetization liability under the Ligand Agreement. This was offset by non-cash charges and changes in operating assets and liabilities, primarily related to $3.7 million of stock-based compensation expense. Net cash used in operating activities was $23.8 million for the six months ended June 30, 2023, which consisted of net loss of $25.8 million offset non-cash charges and changes in operating assets and liabilities, primarily related to $3.9 million of stock-based compensation expense.
Current wording
Net cash used in operating activities was $45.9 million for the nine months ended September 30, 2024, which consisted of net loss of $17.2 million, primarily due to a non-cash fair value adjustment recorded to the royalty monetization liability under the Ligand Agreement resulting in a $29.0 million gain, partially offset by $5.0 million of noncash stock-based compensation expense, . Net cash used in operating activities was $33.9 million for the nine months ended September 30, 2023, which consisted of net loss of $37.0 million offset by non-cash charges and changes in operating assets and liabilities, primarily related to $5.5 million of stock-based compensation expense.
Previous wording
Net cash provided by investing activities was $33.0 million and $50.3 million for the six months ended June 30, 2024 and 2023, respectively, which was due to maturity of marketable securities during the periods.
Current wording
Net cash provided by investing activities was $33.3 million and $45.9 million for the nine months ended September 30, 2024 and 2023, respectively, which was primarily due to maturity of marketable securities during the periods.
Previous wording
Net cash provided by financing activities during the six months ended June 30, 2024 and 2023 resulted from proceeds from the exercise of stock options and purchases under the employee stock purchase plan.
Current wording
Net cash provided by financing activities during the nine months ended September 30, 2024 and 2023 resulted from proceeds from the exercise of stock options and purchases under the employee stock purchase plan.
Previous wording
During the three and six months ended June 30, 2024, there were no material changes to our critical accounting policies as reported for the year ended December 31, 2023 as part of our Annual Report on Form 10-K, which was filed with the SEC on March 8, 2024. In addition, see Note 2 of our condensed consolidated financial statements under the heading “Recent Accounting Pronouncements” for new accounting pronouncements or changes to the accounting pronouncements during the three and six months ended June 30, 2024.
Current wording
During the three and nine months ended September 30, 2024, there were no material changes to our critical accounting policies as reported for the year ended December 31, 2023 as part of our Annual Report on Form 10-K, which was filed with the SEC on March 8, 2024. In addition, see Note 2 of our condensed consolidated financial statements under the heading “Recent Accounting Pronouncements” for new accounting pronouncements or changes to the accounting pronouncements during the three and nine months ended September 30, 2024.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Israel, worsening global macroeconomic conditions and employee availability and wage increases, which may result in additional stress on our working capital resources.
Current report — wording carried from elsewhere
$279.3 million upon the achievement of certain development, regulatory and sales milestones. We excluded these contingent payments from the condensed consolidated financial statements, given that the timing, probability, and amount, if any, of such payments cannot be reasonably estimated at this time.