vTv Therapeutics Inc

Previous wording

As used in this Quarterly Report on Form 10-Q, the “Company”, the “Registrant”, “we” or “us” refer to vTv Therapeutics Inc. and “vTv LLC” refers to vTv Therapeutics LLC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes that appear elsewhere in this report. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, assumptions and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report under “Part II, Other Information—Item 1A, Risk Factors.” Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies and operations, financing plans, potential growth opportunities, potential market opportunities, potential results of our drug development efforts or trials, and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s plans, estimates, assumptions and beliefs only as of the date of this report. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Current wording

In addition to historical financial information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws regarding, among other things, our intentions, plans, estimates, assumptions, predictions and beliefs. Although we believe that these forward-looking statements are based upon reasonable assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors that we believe are appropriate under the circumstances, our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report under “Part II, Other Information—Item 1A, Risk Factors” and under the heading “Risk Factors” under Item 1A of Part I in our Annual Report on Form 10-K. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies and operations, financing plans, potential growth opportunities, potential market opportunities, potential results of our drug development efforts or trials, and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Given the numerous uncertainties and factors to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, you should not place undue reliance on these forward-looking statements and understand that these statements are not guarantees of performance or results. Also, forward-looking statements represent our management’s plans, estimates, assumptions and beliefs only as of the date of this report. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Previous wording

We are a clinical stage pharmaceutical company focused on treating metabolic and inflammatory diseases to minimize their long-term complications and improve the lives of patients. We have an innovative pipeline of first-in-class small molecule clinical and preclinical drug candidates. Our lead program iscadisegliatin, an orally administered, small molecule, liver-selective glucokinase activator (“GKA”) as an adjunctive therapy to insulin for the treatment of type 1 diabetes (“T1D”).

Current wording

We are a clinical stage pharmaceutical company focused on treating metabolic and inflammatory diseases to minimize their long-term complications and improve the lives of patients. We have an innovative pipeline of first-in-class small molecule clinical and preclinical drug candidates. Our lead program iscadisegliatin, an orally administered, small molecule, liver-selective glucokinase activator (“GKA”) in development as an adjunctive therapy to insulin for the treatment of type 1 diabetes (“T1D”).

Previous wording

In May of 2023, the FDA issued new draft guidance on "Diabetes Mellitus: Efficacy Endpoints for Clinical Trials Investigating Antidiabetic Drugs and Biological Products" which, for the first time, permitted the use of hypoglycemia as an endpoint to support a label claim. Consistent with this guidance and with input from the FDA, we initiated our CATT1 trial to assess the effect ofcadisegliatin on reducing the frequency of Level 2 hypoglycemia (blood glucose levels are less than 54 mg/dL or 3 mmol/L, regardless of symptoms) and Level 3 hypoglycemia ("severe" hypoglycemia e.g., requiring assistance of another person) in 150 patients with type 1 diabetes. On July 26, 2024, the FDA issued a clinical hold for thecadisegliatin program, including the CATT1 trial, based on the discovery of a chromatographic signal in a recent human absorption, distribution, metabolism, and excretion (ADME) study ofcadisegliatin that could not be resolved by standard mass spectroscopy. The FDA will require a single in vitro study to characterize this signal before thecadisegliatin program, including the CATT1 trial, can resume. At the time of the clinical hold, no patient had been dosed in the CATT1 trial and past clinical studies did not reveal any clinically concerning safety issues. The Company has initiated activities to address the issue identified by FDA and restart clinical trial activities.

Current wording

In May of 2023, the FDA issued new draft guidance on "Diabetes Mellitus: Efficacy Endpoints for Clinical Trials Investigating Antidiabetic Drugs and Biological Products" which, for the first time, permitted the use of hypoglycemia as an endpoint to support a label claim. Consistent with this guidance and with input from the FDA, we initiated our CATT1 trial to assess the effect ofcadisegliatin on reducing the frequency of Level 2 hypoglycemia (blood glucose levels are less than 54 mg/dL or 3 mmol/L, regardless of symptoms) and Level 3 hypoglycemia ("severe" hypoglycemia e.g., requiring assistance of another person) in 150 patients with type 1 diabetes. On July 26, 2024, the FDA issued a clinical hold for thecadisegliatin program, including the CATT1 trial, based on the discovery of a chromatographic signal in a recent human absorption, distribution, metabolism, and excretion (ADME) study ofcadisegliatin that could not be resolved by standard mass spectroscopy. The FDA will require a single in vitro study to characterize this signal before thecadisegliatin program, including the CATT1 trial, can resume. At the time of the clinical hold, no patient had been dosed in the CATT1 trial and past clinical studies did not reveal any clinically concerning safety issues. The Company has conducted activities to address the issue identified by FDA and restart clinical trial activities.

Previous wording

Our research and development expenses by project for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands):

Current wording

Our research and development expenses by project for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Previous wording

Other income (expense) primarily consists of unrealized gains or losses attributable to the changes in fair value of the equity investments in Reneo Pharmaceuticals, Inc. ("Reneo"), the recognition of changes in fair value of the warrants to purchase shares of our Class A common stock and the loss from the G42 promissory note early redemption on February 28, 2023.

Current wording

Other income (expense) primarily consists of unrealized gains or losses attributable to the changes in fair value of the equity investments in OnKure, the recognition of changes in fair value of the warrants to purchase shares of our Class A common stock, the loss from the G42 promissory note early redemption on February 28, 2023 and the impairment charge from Anteris Bio, Inc. (“Anteris”) liquidation and dissolution..

Previous wording

Research and development expenses were $3.4 million and $4.7 million for the three months ended June 30, 2024 and 2023, respectively. The decrease in research and development expenses during this period of $1.3 million or 26.7%, was primarily driven by i) lower spending oncadisegliatinof $2.0 million, due to decreases in toxicity study costs and drug manufacturing related costs partially offset by increases in clinical trial start-up costs, and ii) an increase in indirect costs and other projects of $0.7 million.

Current wording

Research and development expenses were $3.2 million and $2.8 million for the three months ended September 30, 2024 and 2023, respectively. The increase in research and development expenses during this period of $0.4 million or 14.2%, was primarily driven by i) an increase in indirect costs and other projects of $0.7 million and offset by ii) lower spending oncadisegliatinof $0.3 million, due to decreases in toxicity study costs and drug manufacturing related costs partially offset by increases in clinical trial start-up costs.

Previous wording

General and administrative expenses were $3.7 million and $3.3 million for the three months ended June 30, 2024 and 2023, respectively. The increase in general and administrative expenses during this period of $0.4 million, or 12.3%, was primarily driven by i) increases of $0.3 million in share-based expense, ii) increases of $0.2 million in legal expenses, iii) increases of $0.1 million in payroll related costs, partially offset by iv) decreases of $0.2 million in other general and administrative costs.

Current wording

General and administrative expenses were $3.3 million and $2.5 million for the three months ended September 30, 2024 and 2023, respectively. The increase in general and administrative expenses during this period of $0.7 million, or 29.0%, was primarily driven by i) increases of $0.3 million in share-based expense, ii) increases of $0.2 million in legal expenses and iii) increases of $0.2 million in payroll related costs.

Previous wording

Interest income for the three months ended June 30, 2024, of $0.6 million, is related to dividend income from our money market accounts. Interest income for the three months ended June 30, 2023, of$0.2 million, is related to imputed interest on the promissory notes.

Current wording

Interest income for the three months ended September 30, 2024, of $0.5 million, is related to dividend income from our money market accounts. Interest income for the three months ended September 30, 2023, of$0.1 million, is related to dividend income from our money market account.

Previous wording

Other income was $0.2 million for the three months ended June 30, 2024, and was driven bygains related to the change in the fair value of the outstanding warrants to purchase shares of our own stock. Other income was $0.6 million for the three months ended June 30, 2023, and was driven by an unrealized gain related to our investment in Reneo, as well as gains related to the change in the fair value of the outstanding warrants to purchase shares of our own stock issued to related parties.

Current wording

Other income was $0.2 million for the three months ended September 30, 2024, and was driven bygains related to the change in the fair value of the warrants to purchase shares of our own stock. Other expense was $3.3 million for the three months ended September 30, 2023, and was driven by an impairment charge on a cost-method investment of $4.2 million. This was partially offset by an unrealized gain from the Company’s investment in OnKure and gains from changes in the fair value of warrants to purchase shares of our own stock issued to related parties.

Previous wording

Revenue for the six months ended June 30, 2024 includes a $1.0 million increase to the transaction price for the license performance obligation under the Newsoara License Agreement due to the satisfaction of a development milestone. There was no revenue for the three months ended June 30, 2023.

Current wording

Revenue for the nine months ended September 30, 2024 includes a $1.0 million increase to the transaction price for the license performance obligation under the Newsoara License Agreement due to the satisfaction of a development milestone. There was no revenue for the nine months ended September 30, 2023.

Previous wording

Research and development expenses were $6.1 million and $8.6 million for the six months ended June 30, 2024 and 2023, respectively. The decrease in research and development expenses during the period of $2.5 million, or 29.5%, was primarily driven by i) lower spending oncadisegliatinof $3.4 million due to decreases in toxicity study costs and drug manufacturing related costs, partially offset by increases in clinical trial start-up costs, and ii) increases in indirect costs and other projects of $0.9 million.

Current wording

Research and development expenses were $9.3 million and $11.5 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease in research and development expenses during the period of $2.1 million, or 18.7%, was primarily driven by i) lower spending oncadisegliatinof $3.8 million due to decreases in toxicity study costs and drug manufacturing related costs, partially offset by increases in clinical trial start-up costs, and ii) increases in indirect costs and other projects of $1.7 million.

Previous wording

General and administrative expenses were $7.7 million and $6.8 million for the six months ended June 30, 2024 and 2023, respectively. The increase of $0.9 million or 13.2%, was primarily driven by i) increases of $0.9 million in payroll costs, ii) increases of $0.5 million in legal expense, iii) increases of $0.2 million in share-based expense, partially offset by iv) decreases of $0.7 million in other general and administrative costs.

Current wording

General and administrative expenses were $11.0 million and $9.3 million for the nine months ended September 30, 2024 and 2023, respectively. The increase of $1.6 million or 17.5%, was primarily driven by i) increases of $1.0 million in payroll costs, ii) increases of $0.7 million in legal expense, iii) increases of $0.5 million in share-based expense, partially offset by iv) decreases of $0.6 million in other general and administrative costs.

Previous wording

Interest income for the six months ended June 30, 2024, of $0.6 million, is related todividend income from our money market accounts. Interest income for the six months ended June 30, 2023 of 0.3 millionis related to imputed interest on the G42 Promissory Note and dividend income from our money market account..

Current wording

Interest income for the nine months ended September 30, 2024, of $1.1 million, is related todividend income from our money market accounts. Interest income for the nine months ended September 30, 2023 of 0.4 millionis related to imputed interest on the G42 Promissory Note and dividend income from our money market account.

Previous wording

Other expense was $0.2 million for the six months ended June 30, 2024, driven by losses related to the change in the fair value of the outstanding warrants to purchase shares of our own stock. Other income was $2.2 million for the six months ended June 30, 2023, and was driven by an unrealized gain recognized related to the Company’s investment in Reneo as well as gains related to the change in the fair value of the outstanding warrants to purchase shares of our own stock issued to related parties.

Current wording

Other expense for the nine months ended September 30, 2024 was immaterial. Other expense was $1.1 million for the nine months ended September 30, 2023, and was driven by an impairment charge on a cost-method investment of $4.2 million. This was partially offset by an unrealized gain from the Company’s investment in OnKure and gains from changes in the fair value of warrants to purchase shares of our own stock issued to related parties.

Previous wording

As of June 30, 2024, we had an accumulated deficit of $291.3 million. Since our inception, we have experienced a history of negative cash flows from operating activities. We anticipate that we will continue to incur losses and negative cash flow from operations for the foreseeable future as we continue our clinical trials. Further, we expect that we will need additional capital to continue to fund our operations. As of June 30, 2024, we had cash and cash equivalents of $45.5 million.

Current wording

As of September 30, 2024, we had an accumulated deficit of $296.1 million. Since our inception, we have experienced a history of negative cash flows from operating activities. We anticipate that we will continue to incur losses and negative cash flow from operations for the foreseeable future as we continue our clinical trials. Further, we expect that we will need additional capital to continue to fund our operations. As of September 30, 2024, we had cash and cash equivalents of $41.6 million.

Previous wording

On February 28, 2024, we entered into a sales agreement (the "TD Cowen Sales Agreement") with Cowen and Company, LLC (“TD Cowen”) pursuant to which we may offer and sell, from time to time, through or to TD Cowen, as sales agent or principal, shares of our Class A common stock having an aggregate offering price of up to $50.0 million, although we may only offer and sell under the TD Cowen ATM Offering up to one-third of the aggregate market value of our Class A common stock held by non-affiliates during any 12 calendar month period pursuant to General Instruction I.B.6 of Form S-3. We are not obligated to sell any shares under the TD Cowen Sales Agreement. Under the terms of the TD Cowen Sales Agreement, we will pay TD Cowen a commission of 3% of the aggregate proceeds from the sale of shares and reimburse certain legal fees or other disbursements. As of June 30, 2024 we have not sold any shares pursuant to the TD Cowen Sales Agreement

Current wording

On February 28, 2024, we entered into a sales agreement (the "TD Cowen Sales Agreement") with Cowen and Company, LLC (“TD Cowen”) pursuant to which we may offer and sell, from time to time, through or to TD Cowen, as sales agent or principal, shares of our Class A common stock having an aggregate offering price of up to $50.0 million, although we may only offer and sell under the TD Cowen ATM Offering up to one-third of the aggregate market value of our Class A common stock held by non-affiliates during any 12 calendar month period pursuant to General Instruction I.B.6 of Form S-3. We are not obligated to sell any shares under the TD Cowen Sales Agreement. Under the terms of the TD Cowen Sales Agreement, we will pay TD Cowen a commission of 3% of the aggregate proceeds from the sale of shares and reimburse certain legal fees or other disbursements. As of September 30, 2024, we have sold 179,400 shares of Class A common stock under the TD Cowen ATM Offering for net proceeds of $2.5 million, leaving $47.5 million available to be sold. The shares are offered and sold pursuant to the Company’s shelf registration statement on Form S-3. In no event will we sell Class A common stock under this registration statement with a value exceeding more than one-third of the “public float” (the market value of our Class A common stock and any other equity securities that we may issue in the future that are held by non-affiliates) in any 12-calendar month period so long as our public float remains below $75 million.

Previous wording

For the six months ended June 30, 2024, our net cash used in operating activities increased by $2.7 million from the six months ended June 30, 2023. The significant contributor to the change in cash used during the year was working capital changes.

Current wording

For the nine months ended September 30, 2024, our net cash used in operating activities increased by $4.3 million from the nine months ended September 30, 2023. The significant contributor to the change in cash used during the year was working capital changes.

Previous wording

There were no cash flows from investing activities for the six months ended June 30, 2024 and 2023.

Current wording

There were no cash flows from investing activities for the nine months ended September 30, 2024 and 2023.

Previous wording

For the six months ended June 30, 2024, net cash provided by financing activities was driven by sales of our Class A common stock and proceeds from pre-funded warrants of $51.0 million from the Private Placement financing. For the six months ended June 30, 2023, net cash provided by financing activities was driven by the receipt of proceeds of $12.0 million from the G42 promissory note early redemption.

Current wording

For the nine months ended September 30, 2024, net cash provided by financing activities was driven by sales of our Class A common stock and proceeds from pre-funded warrants of $51.0 million from the Private Placement financing and proceeds from the TD Cowen ATM Offering of $2.5 million. For the nine months ended September 30, 2023, net cash provided by financing activities was driven by the receipt of proceeds of $12.0 million from the G42 promissory note early redemption.