Quince Therapeutics Inc
For the period ended Jun 30, 2024. Filed Aug 13, 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.
Jun 30, 2024 · Filed Aug 13, 2024
QNCX$31.73+8.1%Stored close · as of Oct 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-13.
0000950170-24-058201
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001662774-24-000005
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 139 previous paragraphs and 152 current paragraphs.
83 unchanged; 37 reworded; 27 added; 14 removed; 5 previous and 5 current paragraphs rearranged.
Tables are not compared: 3 previous and 5 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 (27)
Current report
We enrolled the first patient in the Phase 3 NEAT clinical trial of EryDex in A-T during the second quarter of 2024. We expect to report topline results from this trial in the fourth quarter of 2025, with a potential NDA submission in 2026, assuming positive study results.
Current report
In accordance with the purchase agreement entered into in connection with EryDel Acquisition, we notified the former EryDel shareholders of this achievement within 45 days of achieving this milestone. Additionally, within 30 days of the notification, we are required to make a cash milestone payment of $5 million to the former EryDel shareholders.We owe no further payments to EryDel shareholders for development-related milestones. The remaining potential contingent payments in connection with the EryDel Acquisition pertain to regulatory, on market and sales milestones.
Current report
In June 2024, the FDA granted Fast Track designation for our EryDex System for the treatment of patients with A-T. The Fast Track designation has been granted based on the potential for EryDex to address a high unmet medical need for patients with A-T.
Current report
•Initiate our open label extension study in 2024.
Current report
•Complete enrollment in our Phase 3 NEAT clinical trial in the first half of 2025.
Current report
The pivotal Phase 3 NEAT clinical trial is conducted under an SPA agreement with the U.S. FDA, which should allow for the submission of an NDA following completion of this study, provided we obtain positive results. Additionally, the FDA recently granted Fast Track designation for our EryDex System for the treatment of patients with A-T. The Fast Track designation has been granted based on the potential for EryDex to address a high unmet medical need for patients with A-T. Fast Track designation provides opportunities for frequent interactions with FDA review staff, as well as eligibility for priority review, if relevant criteria are met, and rolling review.
Current report
Research and development expenses were $4.2 million for the three months ended June 30, 2024, compared to $1.4 million for the three months ended June 30, 2023, an increase of $2.8 million.
Current report
After the decision made on January 30, 2023 to discontinue internal development of NOV004 and following the termination of the License Agreement with PRF on October 31, 2023, we have not and do not expect to incur any NOV004 costs in 2024.
Current report
Our personnel related costs increased by $35.0 thousand during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, mainly as a result of a $0.3 million increase in personnel related expenses, offset by a $0.3 million decrease in allocated stock-based compensation costs.
Current report
Goodwill Impairment Charge
Current report
During the three months ended June 30, 2024, we conducted an impairment analysis of our goodwill that resulted from the acquisition of EryDel in October 2023. That assessment included a qualitative assessment of deteriorating macro-economic conditions, including inflationary pressures and high interest rates, and the continuing decline in our market capitalization from the date of acquisition. This qualitative assessment indicated that our goodwill was potentially impaired. To determine the extent, if any, by which our goodwill was impaired, we conducted additional quantitative analyses which resulted in our fair value being significantly below our current carrying value. As a result of the analyses, we recorded a non-cash goodwill impairment charge of $17.1 million for the three months ended June 30, 2024.
Current report
Results of Operations
Current report
Comparison of the six months ended June 30, 2024 to the six months ended June 30, 2023
Current report
Research and development expenses were $7.8 million for the six months ended June 30, 2024, compared to $4.6 million for the six months ended June 30, 2023, an increase of $3.3 million.
Current report
Facilities and other research and development expenses increased by $11.0 thousand for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 primarily due to an increase in rent and facilities expenses.
Current report
General and Administrative Expenses
Current report
General and administrative expenses increased by $1.6 million to $9.7 million for the six months ended June 30, 2024, from $8.1 million for the six months ended June 30, 2023. The increase in general and administrative expenses is primarily due to an increase of $1.6 million in personnel related expenses, $0.2 million increase in commercial and new product planning expenses, $0.1 million increase in consulting, audit, and tax fees, and $0.8 million increase in other professional and administrative expenses year over year. These increases were partially offset by a decrease of $1 million in legal fees and $0.1 million in corporate insurance expenses.
Current report
For the six months ended June 30, 2024, we recorded a fair value adjustment for contingent consideration which resulted in a $4.8 million charge primarily due to the passage of time related to the contingent consideration earnouts resulting from the EryDel Acquisition and achieving the first milestone after dosing the first patient in our Phase 3 NEAT clinical trial.
Current report
For the six months ended June 30, 2024, we recorded a fair value adjustment for long-term debt which resulted in a $0.8 million charge primarily due to the passage of time and the interest accrued for the loan with the EIB.
Current report
Goodwill Impairment Charge
Current report
During the six months ended June 30, 2024, we conducted an impairment analysis of our goodwill that resulted from the acquisition of EryDel in October 2023. That assessment included a qualitative assessment of deteriorating macro-economic conditions, including inflationary pressures and high interest rates, and the continuing decline in our market capitalization from the date of the acquisition. This qualitative assessment indicated that our goodwill was potentially impaired. To determine the extent, if any, by which our goodwill was impaired, we conducted additional quantitative analyses which resulted in our fair value being significantly below our current carrying value. As a result of the analyses, we recorded a non-cash goodwill impairment charge of $17.1 million for the six months ended June 30, 2024.
Current report
Intangible Assets Impairment Charge
Current report
Other income (expense), net increased by $45.0 thousand for the six months ended June 30, 2024 primarily due to unrealized gains resulting from changes in foreign exchange rates.
Current report
Income Tax
Current report
In connection with the acquisition of EryDel on October 20, 2023, we assumed an unsecured line of credit between EryDel and the European Investment Bank (the "EIB Loan"). The EIB Loan was amended and restated as of the acquisition date. The EIB Loan provides for maximum borrowings of 30.0 million euro through four tranches; tranche A, 3.0 million euro; tranche B, 7.0 million euro; tranche C, 10.0 million euro; and tranche D, 10.0 million euro. Each tranche is subject to conditions precedent related to our business and capitalization. As of June 30, 2024, only tranches A and B have been drawn. All amounts due under tranche A and B are payable on their maturity date of August 2026. Tranche C and D are payable in equal installments of principal together with all amounts outstanding under the tranches on the repayment dates specified in the relevant Disbursement Offer. The first Repayment Date of tranche C shall fall not earlier than twelve months from the Disbursement Date of such tranche. The last Repayment Date of tranche C and tranche D shall fall not later than 5 years from the Disbursement Date of tranche C and tranche D, respectively. The EIB Loan bears interest at fixed rates for each tranche and is payable on the maturity date for each Tranche. The fixed rates range from 7.0% to 9.0% per annum. As of June 30, 2024, principal of 10.0 million euros ($10.8 million) was outstanding on the EIB Loan and it is recorded as Long-term debt on the condensed consolidated balance sheet at fair value with imputed interest of 9.0% included.
Current report
We may voluntarily prepay, in whole or in part with a prepayment premium. In the event of an occurrence of an event of default, a change in control and certain other prepayment events, as specified in the Debt Agreement, we will be required to prepay the outstanding EIB Debt together with an additional remuneration buyout fee, as specified in the Debt Agreement. The Debt Agreement includes a provision for additional remuneration to be paid in addition to interest. The amount of additional remuneration to be paid is equal to 2.5% of revenue up to 125.0 million euros, plus 1.85% of revenue between 125.0 and 250.0 million euros, plus 1.0% of revenue in excess of 250.0 million euros, multiplied by a varying percentage based on how many tranches have been drawn. The varying percentage is equal to 30.0% in the event tranche A has been drawn, 50.0% in the event tranche A and B have been drawn, 80.0% in the event tranche A, B and C have been drawn, and 100.0% in the event all four tranches have been drawn. The additional remuneration is payable for seven years, during the period January 1, 2026, through December 31, 2032. In the event of an occurrence of an event of default or prepayment, we may be required to pay an additional remuneration buyout fee.
Current report
As of June 30, 2024, we have been in compliance with all covenants under the Debt Agreement.
Removed paragraphs (14)
Previous report
We expect to begin enrollment in the Phase 3 NEAT clinical trial of EryDex in A-T in the second quarter of 2024.
Previous report
EryDex for the potential treatment of patients with DMD, including corticosteroid intolerant populations, in addition to evaluating optimal capital efficient study approaches such as investigator initiated trials and Phase 2/3 options.
Previous report
Note: Information represented does not reflect a completed comparative study of EryDex versus oral/IV administration of DSP, but rather provides a comparison of published corticosteroid pharmacokinetic information relative to company data regarding EryDex. IC50 and SC50 refer to pharmacodynamic parameters of which IC50 reflects drug concentration eliciting 50% of the maximum inhibition and SC50 reflects drug concentration eliciting 50% of the maximum stimulation. References: Company prior Phase 3 ATTeST clinical trial data (ClinicalTrials.gov ID: NCT02770807); Montanha et al, Frontiers in Pharmacology (2022) 13: 814134; Krzyzanski et al, Journal of Pharmacokinetics and Pharmacodynamics (2021) 48: 411-438; Aljebab et al, PLOS ONE (2017) 10: 1371.
Previous report
Complete start up activities for our Phase 3 NEAT clinical trial by the end of second quarter of 2024.
Previous report
Enroll the first patient in our Phase 3 NEAT clinical trial in the second quarter of 2024.
Previous report
Note: mICARS = Modified International Cooperative Ataxia Rating Scale by Central Rater • LSM = Least Square Means
Previous report
Note: mICARS = Modified International Cooperative Ataxia Rating Scale by Central Rater • LSM = Least Square Means
Previous report
Interest Income
Previous report
Other Expense, net
Previous report
Research and development expenses were $3.7 million for the three months ended March 31, 2024, compared to $3.2 million for the three months ended March 31, 2023, an increase of $0.5 million. We anticipate our research and development expenses to increase significantly from current levels as we prepare to begin enrollment and proceed with the Phase 3 NEAT clinical trial.
Previous report
Intangible Asset Impairment Charge
Previous report
Interest Income
Previous report
Other Expense, net
Previous report
We will need substantial additional funding to support our continuing operations and pursue our development strategy. Until such time as we can generate significant revenue from sales of an approved drug, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our drug candidates or delay our efforts to expand our product pipeline.
Reworded paragraphs (37)
Previous wording
We are a late-stage biotechnology company dedicated to unlocking the power of a patient’s own biology to deliver innovative therapies to those living with rare diseases.
Current wording
We are a late-stage biotechnology company dedicated to unlocking the power of a patient’s own biology for the treatment of rare diseases.
Previous wording
We completed an initial patient sizing project with third-party analysis from IQVIA Medical Claims (Dx), IQVIA Analytics, which confirmed that there are approximately 3,400 diagnosed patients with A-T in the U.S. This aligns with an estimated U.S. prevalence of approximately 5,000 patients with A-T in the U.S. Currently, there are no approved treatments for A-T and the global market, based on our internal estimates and assumptions, represents a more than $1 billion peak commercial opportunity. We believe this could make EryDex an ideal lead asset to demonstrate the clinical and commercial potential of our AIDE technology.
Current wording
We updated an initial patient sizing project with further third-party analysis from IQVIA Medical Claims (Dx), PharmetricsPlus (P+), and IQVIA Analytics, which confirmed that there are approximately 4,600 diagnosed patients with A-T in the U.S. as of July 2024, an increase from previous estimates of approximately 3,400 diagnosed patients with A-T in the U.S. Currently, there are no approved treatments for A-T and the global market, based on our internal estimates and assumptions, represents a more than $1 billion peak commercial opportunity. We believe this could allow EryDex to demonstrate the clinical benefit and commercial potential of our AIDE technology.
Previous wording
The RCL is a proprietary CE marked non-invasive device that allows blood processing at the point of care. With a user-friendly touch screen interface, the RCL automates the AIDE process technology by handling the blood, drug, and processing solutions with the use of the proprietary EryKit. Our EryKit is a CE marked medical device that provides the essential single-use components for loading the patient’s red blood cells with DSP by using the
Current wording
The RCL is a proprietary CE marked non-invasive device that allows blood processing at the point of care. With a user-friendly touch screen interface, the RCL automates the AIDE process technology by handling the blood, drug, and processing solutions with the use of the proprietary EryKit. Our EryKit is a CE marked medical device that provides the essential single-use components for loading the patient’s red blood cells with DSP by using the RCL. The RCL, EryKit, and Syringe Kit have been CE marked in accordance with the MDR. Process solutions (Hypotonic Solution 1&2 and Hypertonic Solution PIGPA) are proprietary sterile solutions, CE marked according to the MDD, aimed to create suitable osmotic condition during the process to allow the drug diffusion into red blood cells and the subsequent restoring of physiological condition.
Previous wording
We selected Duchenne muscular dystrophy (DMD) as our second development program. We consider DMD an ideal indication for EryDex as corticosteroids are the standard of care for this rare disease, but its utility is limited by significant chronic toxicity due to adrenal suppression. As a result, corticosteroid treatment in patients with DMD is commonly interrupted during adolescence due to interference with sexual maturation and delayed puberty. As a next step, we intend to focus on generating proof-of-concept clinical trial study designs to evaluate
Current wording
We selected Duchenne muscular dystrophy (DMD) as our second development program. We consider DMD an ideal indication for EryDex as corticosteroids are the standard of care for this rare disease, but its utility is limited by significant chronic toxicity due to adrenal suppression. As a result, corticosteroid treatment in patients with DMD is commonly interrupted during adolescence due to interference with sexual maturation and delayed puberty. As a next step, we intend to focus on generating proof-of-concept clinical trial study designs to evaluate EryDex for the potential treatment of patients with DMD, including those with corticosteroid intolerance who represent the majority of the DMD population. We plan to initiate a DMD proof-of-concept study in 2025, which we plan to conduct utilizing capital efficient study approaches.
Previous wording
Our strategic priority is to complete the Phase 3 clinical trial of EryDex, called NEAT (Neurologic Effects of EryDex on Subjects with A-T; NCT06193200 / IEDAT-04-2022), to evaluate its safety and efficacy for the potential treatment of A-T. We also will investigate additional indications for EryDex. These priorities include the following activities and corporate milestones:
Current wording
Our top strategic priority is to complete the Phase 3 clinical trial of EryDex, called NEAT (Neurologic Effects of EryDex on Subjects with A-T; NCT06193200 / IEDAT-04-2022), to evaluate its safety and efficacy for the potential treatment of A-T. We also plan to continue investigating additional indications for EryDex. These priorities include the following activities and corporate milestones:
Previous wording
Report our Phase 3 NEAT clinical trial top-line results in the second half of 2025.
Current wording
•Report our Phase 3 NEAT clinical trial top-line results in the fourth quarter of 2025.
Previous wording
Prepare for a U.S. NDA submission in 2026, provided we obtain positive NEAT study results.
Current wording
•Prepare for a U.S. NDA submission in 2026, provided we obtain positive NEAT clinical trial results.
Previous wording
Beginning in the second quarter of 2024, we expect to begin enrollment of the global Phase 3 clinical trial. NEAT is an international, multicenter, randomized, double-blind, placebo-controlled study to evaluate the neurological effects of EryDex in patients with A-T. We plan to enroll approximately 86 patients with A-T ages six to nine years old randomized (1:1) between EryDex or placebo, and approximately 20 patients with A-T ages 10 years or older. Participants who complete the full treatment period, complete the study assessments, and provide informed consent will be eligible to transition to an open label extension program after trial completion. The primary efficacy endpoint for the NEAT study will be measured by the change from baseline to last visit completion in RmICARS.
Current wording
We dosed the first patient with A-T in our Phase 3 NEAT clinical trial in the second quarter of 2024. NEAT is an international, multi-center, randomized, double-blind, placebo-controlled study to evaluate the neurological effects of EryDex in patients with A-T. To date, we have enrolled seven patients with A-T in the NEAT clinical trial across clinical sites in the U.S., U.K., and European Union and expect NEAT site activation and patient screenings to accelerate over the next quarter. We plan to enroll approximately 86 patients with A-T ages six to nine years old randomized (1:1) between EryDex or placebo, and approximately 20 patients with A-T ages 10 years or older. Participants who complete the full treatment period, complete the study assessments, and provide informed consent will be eligible to transition to an open label extension program after trial completion. The primary efficacy endpoint for the NEAT clinical trial will be measured by the change from baseline to last visit completion in RmICARS.
Previous wording
The pivotal Phase 3 NEAT clinical trial will be conducted under an SPA agreement with the U.S. FDA, which should allow for the submission of an NDA following completion of this study, provided we obtain positive results. Our plan would be to submit the NDA in 2026 with expectations to submit a MAA to the EMA shortly thereafter. EryDex has been classified as a drug/device combination product by the U.S. FDA. We anticipate submitting a 505(b)(2) NDA to the FDA, which allows us to rely upon the agency’s prior findings of safety and effectiveness for the active pharmaceutical ingredient, DSP.
Current wording
Our plan would be to submit the NDA in 2026 with expectations to submit a MAA to the EMA shortly thereafter. EryDex has been classified as a drug/device combination product by the U.S. FDA. We anticipate submitting a 505(b)(2) NDA to the FDA, which allows us to rely upon the agency’s prior findings of safety and effectiveness for the active pharmaceutical ingredient, DSP.
Previous wording
To date, our research and development expenses have supported the advancement of atuzaginstat (COR388) and COR588 and to a lesser extent the clinical and regulatory development of NOV004. As we sold our legacy protease inhibitor portfolio including COR388 and COR588 to Lighthouse Pharmaceuticals, Inc. in January 2023, we did not incur any additional expenses related to these legacy assets from the second quarter of 2023 onward. Additionally, due to the decision made on January 30, 2023 to discontinue internal development of NOV004 and following the termination of the License Agreement with PRF on October 31, 2023, we have not and do not expect to incur any NOV004 costs in 2024.
Current wording
Historically, our research and development expenses have supported the advancement of atuzaginstat (COR388) and COR588 and to a lesser extent the clinical and regulatory development of NOV004. As we sold our legacy protease inhibitor portfolio including COR388 and COR588 to Lighthouse Pharmaceuticals, Inc. in January 2023, we did not incur any additional expenses related to these legacy assets from the second quarter of 2023 onward. Additionally, due to the decision made on January 30, 2023 to discontinue internal development of NOV004 and following the termination of the License Agreement with PRF on October 31, 2023, we have not and do not expect to incur any NOV004 costs in 2024.
Previous wording
With the acquisition of EryDel, we expect our research and development expenses to increase significantly from current levels as we prepare to begin enrollment and proceed with the Phase 3 NEAT clinical trial.
Current wording
With the acquisition of EryDel, we expect our research and development expenses to remain in the current levels as we continue our Phase 3 NEAT clinical trial and potentially expand into new indications.
Previous wording
We record fair value adjustment for contingent consideration primarily due to the passage of time related to the contingent consideration earn-outs resulting from the EryDel Acquisition. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations.
Current wording
We record fair value adjustment for contingent consideration primarily due to the passage of time related to the contingent consideration earnout resulting from the EryDel Acquisition. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations.
Previous wording
Other expense, net consists primarily of the effects of foreign currency exchange rates.
Current wording
Other income (expense), net consists primarily of the effects of foreign currency exchange rates.
Previous wording
The following sets forth our results of operations for the three months ended March 31, 2024 and 2023 (in thousands):
Current wording
The following sets forth our results of operations for the three months ended June 30, 2024 and 2023 (in thousands, except for percentages):
Previous wording
Research and Development Expenses(in thousands):
Current wording
Research and Development Expenses(in thousands, except for percentages):
Previous wording
Facilities and other research and development expenses decreased by $43,000 for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023 primarily due to a decrease in allocated rent and facilities expenses.
Current wording
Facilities and other research and development expenses increased by $54.0 thousand for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023 primarily due to an increase in rent and facilities expenses.
Previous wording
General and administrative expenses increased by $1.1 million to $5.0 million for the three months ended March 31, 2024, from $3.8 million for the three months ended March 31, 2023. The increase in general and administrative expenses is primarily due to an increase of $0.6 million in personnel related expenses, a $0.3 million increase in audit and tax fees, and a $0.2 million increase in consulting fees. We also incurred a $0.3 million increase in other professional and administrative expenses year over year. These increases were partially offset by a decrease of $0.3 million in legal fees.
Current wording
General and administrative expenses increased by $0.5 million to $4.7 million for the three months ended June 30, 2024, from $4.2 million for the three months ended June 30, 2023. The increase in general and administrative expenses is primarily due to an increase of $1.0 million in personnel related expenses, a $0.2 million increase in commercial and new product planning expenses, and a $0.2 million increase in other professional and administrative expenses year over year. These increases were partially offset by a decrease of $0.7 million in legal fees and $0.2 million decrease in consulting, audit and tax fees.
Previous wording
For the three months ended March 31, 2024, we recorded a fair value adjustment for contingent consideration which resulted in a $2.5 million charge primarily due to the passage of time related to the contingent consideration earn-outs resulting from the EryDel Acquisition.
Current wording
For the three months ended June 30, 2024, we recorded a fair value adjustment for contingent consideration which resulted in a $2.2 million charge primarily due to the passage of time related to the contingent consideration earnouts resulting from the EryDel Acquisition and achieving the first milestone after dosing the first patient in our Phase 3 NEAT clinical trial.
Previous wording
Other expense increased by $0.2 million for the three months ended March 31, 2024 primarily due to $0.2 million higher unrealized losses resulting from changes in foreign exchange rates, offset by lower gain of $0.1 million as compared to the three months ended March 31, 2023 sale related to the equity investment in Lighthouse, Inc. in exchange for our legacy assets.
Current wording
Other income (expense), net increased by $0.2 million for the three months ended June 30, 2024 primarily due to $0.2 million unrealized gains resulting from changes in foreign exchange rates.
Previous wording
We recorded $31,000 of tax expense for the three months ended March 31, 2024, primarily related to foreign withholding tax, interest on uncertain tax position liability and net of tax benefit from decrease in EryDel's deferred tax liabilities.
Current wording
We recorded $36.0 thousand of tax expense for the three months ended June 30, 2024, primarily related to foreign withholding tax, interest on uncertain tax position liability and net of tax benefit from decrease in EryDel's deferred tax liabilities.
Previous wording
The costs for EryDex development increased by $2.7 million compared to the same period from the prior year due to the start-up costs related to the Phase 3 NEAT clinical trial. This increase was primarily due to an increase in clinical trial costs of $2.4 million and a $0.3 million increase in medtech and drug manufacturing costs.
Current wording
The costs for EryDex development increased by $5.7 million compared to the same period from the prior year due to the start-up costs related to the Phase 3 NEAT clinical trial. This increase was primarily due to clinical trial costs of $5.2 million and $0.5 million increase in manufacturing costs.
Previous wording
As we sold our legacy protease inhibitor portfolio including COR388 and COR588 to Lighthouse Pharmaceuticals, Inc. in January 2023, we did not incur any additional expenses related to these legacy assets from the second quarter of 2023 onward. Additionally, due to the decision made on January 30, 2023 to discontinue internal development of NOV004 and following the termination of the License Agreement with PRF on October 31, 2023, we have not and do not expect to incur any NOV004 costs in 2024.
Current wording
As we sold our legacy protease inhibitor portfolio including COR388 and COR588 to Lighthouse Pharmaceuticals, Inc. in January 2023, we did not incur any additional expenses related to these legacy assets from the second quarter of 2023 onward. After the decision made on January 30, 2023 to discontinue internal development of NOV004 and following the termination of the License Agreement with PRF on October 31, 2023, we have not and do not expect to incur any NOV004 costs in 2024.
Previous wording
Our personnel related costs decreased by $0.4 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, as a result of a $0.3 million decrease in allocated stock-based compensation costs, and a decrease of $0.2 million related to reduced headcount year over year, offset by a $0.1 million increase in payroll tax expense.
Current wording
Our personnel related costs decreased by $0.4 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, mainly as a result of a $0.5 million decrease in allocated stock-based compensation costs, offset by a $0.1 million increase in personnel related expenses.
Previous wording
During the three months ended March 31, 2023, we conducted an impairment analysis of our intangible asset IPR&D that resulted from the purchase of Novosteo, Inc. in May 2022. To determine the extent, if any, by which our IPR&D Intangible Asset was impaired, we conducted a quantitative analysis which resulted in our fair value being significantly below our current carrying value due to the assumptions changing as a result of the decision to hold this asset for sale in January 2023. As a result of the analyses, we recorded a non-cash intangible asset IPR&D impairment charge of $5.9 million for the three months ended March 31, 2023. No impairment charges were recognized during the three months ended March 31, 2024.
Current wording
During the six months ended June 30, 2023, we conducted an impairment analysis of our intangible asset IPR&D that resulted from the purchase of Novosteo, Inc. in May 2022. To determine the extent, if any, by which our IPR&D Intangible Asset was impaired, we conducted a quantitative analysis which resulted in our fair value being significantly below our current carrying value due to the assumptions changing as a result of the decision to hold this asset for sale in January 2023. As a result of the analyses, we recorded a non-cash intangible asset IPR&D impairment charge of $5.9 million for the six months ended June 30, 2023.
Previous wording
Interest income increased by $0.2 million for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase was due to increased yields on our investment portfolio which were partially offset by decreased average balances.
Current wording
Interest income increased by $0.2 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The change was due to increased yields on our investment portfolio which were partially offset by decreased average balances.
Previous wording
Since commencing material operations in 2014, we have devoted substantially all of our efforts and financial resources to building our research and development capabilities, establishing our corporate infrastructure and most recently, executing our Phase1a, Phase 1b and Phase 2/3 clinical trials of atuzaginstat (COR388), our Phase I SAD/MAD clinical trial of COR588 and to a lesser extent readying NOV004 for Phase 1 clinical trials. We have sold our legacy small molecule protease inhibitor portfolio and intend to out license our NOV004 bone targeting drug. We are focused on acquiring, developing, and commercializing innovative therapeutics for patients suffering from debilitating and rare diseases.
Current wording
Since commencing material operations in 2014, we have devoted substantially all of our efforts and financial resources to building our research and development capabilities, establishing our corporate infrastructure and most recently, executing our Phase1a, Phase 1b and Phase 2/3 clinical trials of atuzaginstat (COR388), our Phase I SAD/MAD clinical trial of COR588, to a lesser extent readying NOV004 for Phase 1 clinical trial, and initiating EryDex Phase 3 NEAT clinical trial. We have sold our legacy small molecule protease inhibitor portfolio and terminated the license of our NOV004 bone targeting drug.
Previous wording
To date, we have not generated any revenue and we have never been profitable. We have incurred net losses since the commencement of our operations. As of March 31, 2024, we had an accumulated deficit of $330.8 million. We incurred a net loss of $11.1 million in the three months ended March 31, 2024. We do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize a drug candidate, and we cannot assure you that we will ever generate significant revenue or profits.
Current wording
To date, we have not generated any revenue and we have never been profitable. We have incurred net losses since the commencement of our operations. As of June 30, 2024, we had an accumulated deficit of $358.5 million. We incurred a net loss of $38.9 million in the six months ended June 30, 2024. We do not expect to generate product revenue unless and until we obtain marketing approval for and commercialize a drug candidate, and we cannot assure you that we will ever generate significant revenue or profits.
Previous wording
As of March 31, 2024 and December 31, 2023, we had cash, cash equivalents and short-term investments of $67.8 million and $75.1 million, respectively. Based on our current business plans, we believe that our existing capital resources will be sufficient to fund our projected operating requirements for at least the next twelve months from the date of the issuance of the accompanying condensed consolidated financial statements. Our cash, cash equivalents, and marketable debt securities are held in a variety of deposit accounts, interest-bearing accounts, U.S government securities, debt securities in government-sponsored entities, and money market funds. Cash in excess of immediate requirements is invested with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and credit risk. Our cash equivalents and short-term investments are held in money market funds, certificate of deposits, and government agency obligations.
Current wording
As of June 30, 2024 and December 31, 2023, we had cash, cash equivalents and short-term investments of $59.4 million and $75.1 million, respectively. Based on our current business plans, we believe that our existing capital resources will be sufficient to fund our projected operating requirements for at least the next twelve months from the date of the issuance of the accompanying condensed consolidated financial statements. Our cash, cash equivalents, and marketable debt securities are held in a variety of deposit accounts, interest-bearing accounts, U.S government securities, debt securities in government-sponsored entities, and money market funds. Cash in excess of immediate requirements is invested with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and credit risk. Our cash equivalents and short-term investments are held in money market funds, certificate of deposits, and government agency obligations.
Previous wording
We believe that our existing cash, cash equivalents and investments will be sufficient to fund our planned operations into at least 2026, but does not include any costs or cash expenditures associated with our in-licensing activities. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.
Current wording
We believe that our existing cash, cash equivalents and investments will be sufficient to fund our planned operations into at least 2026, but does not include any costs or cash expenditures associated with initiating additional programs. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.
Previous wording
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. However, based on our current business plans, we believe that our existing cash, cash equivalents and investments will be sufficient to fund our planned operations, which would include anticipated clinical and development activities related to EryDex through completion of the Phase 3 NEAT clinical trial, and into 2026.
Current wording
Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. However, based on our current business plans, we believe that our existing cash, cash equivalents and investments will be sufficient to fund our planned operations, which would include anticipated clinical and development activities related to EryDex through completion of the Phase 3 NEAT clinical trial, and into 2026, but does not include any costs or cash expenditures associated with initiating additional programs. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.
Previous wording
Net cash used in operating activities was $8.4 million for the three months ended March 31, 2024. Cash used in operating activities was primarily due to our net loss of $11.1 million for the period, adjusted for $3.6 million of non-cash items, including $2.5 million change in the fair value of contingent consideration liabilities, $1.3 million in stock-based compensation, and a net decrease in accounts payable, accrued expenses and other current liabilities of $0.3 million, partially offset by increases in our current assets of $0.5 million.
Current wording
Cash used in operating activities was $17.1 million for the six months ended June 30, 2024. Cash used in operating activities was primarily due to our net loss of $38.9 million for the period, adjusted for $24.0 million of non-cash items, including $17.1 million goodwill impairment charge, $4.8 million change in the fair value of contingent consideration liabilities, $2.5 million in stock-based compensation, and a net increase in our operating assets of $2.3 million, offset by a net increase in our accounts payable, accrued expenses and other current liabilities of $0.1 million.
Previous wording
Net cash used in operating activities was $3.6 million for the three months ended March 31, 2023. Cash used in operating activities was primarily due to our net loss of $12.3 million for the period, adjusted for $7.1 million of non-cash items, including $1.5 million in stock-based compensation and $5.9 million in impairment loss due to the write down of the IPR&D asset, as well as a net decrease in our current assets of $1.4 million, and a net increase in accounts payable, accrued expenses and other current liabilities of $0.2 million.
Current wording
Cash used in operating activities was $7.4 million for the six months ended June 30, 2023. Cash used in operating activities was primarily due to our net loss of $17.1 million for the period, adjusted for $7.9 million of non-cash items, including $2.8 million in stock-based compensation and $5.9 million in impairment loss due to the write down of the IPR&D asset, as well as a net decrease in our current assets of $2.8 million, offset by a net decrease in accounts payable, accrued expenses and other current liabilities of $1.0 million.
Previous wording
Cash provided by investing activities was $8.9 million in the three months ended March 31, 2024, primarily related to the maturities of short-term investments of $48.2 million, and the purchase of investments of $39.3 million.
Current wording
Cash provided by investing activities was $3.9 million for the six months ended June 30, 2024, primarily related to the maturities of short-term investments of $89.7 million, and the purchase of investments of $85.7 million.
Previous wording
Cash provided by investing activities was $5.5 million in the three months ended March 31, 2023, primarily related to the purchase of investments of $7.7 million, and maturities of short-term investments of $13.3 million.
Current wording
Cash used in investing activities was $14.8 million in the six months ended June 30, 2023, primarily related to the purchase of investments of $50.1 million and maturities of investments of $35.4 million.
Previous wording
Cash provided by financing activities was $0.2 million in the three months ended March 31, 2024, which consisted of net proceeds from the exercise of stock options in the period.
Current wording
Cash provided by financing activities was $0.2 million for the six months ended June 30, 2024, which consisted of net proceeds from the exercise of stock options in the period.
Previous wording
Cash provided by financing activities was $0.1 million in the three months ended March 31, 2023, which consisted of net proceeds from the exercise of stock options in the period.
Current wording
Cash provided by financing activities was $0.1 million in the six months ended June 30, 2023, which consisted of net proceeds from the exercise of stock options in the period.
Previous wording
We enter into contracts in the normal course of business with third party contract organizations for clinical trials, non-clinical studies and testing, manufacturing, and other services and products for operating purposes. The amount and timing of the payments under these contracts varies based upon the timing of the services. We have recorded accrued expense of approximately $1.6 million in our condensed consolidated balance sheet for expenditures incurred by these vendors as of March 31, 2024. We have approximately $14.3 million in cancellable future operating expense commitments based on existing contracts as of March 31, 2024. These obligations will be satisfied in the normal course of business, but generally no longer than 12 months. As of March 31, 2024, the fair value of the EIB loan is $13.5 million and it is recorded as long-term debt on the condensed consolidated balance sheet at fair value. As of March 31, 2024, the fair value of long-term contingent consideration on our books for the earnout related to the EryDel Acquisition is $60.3 million and the short-term portion is $4.7 million, refer to Note 3 to the condensed consolidated financial statements for further details.
Current wording
We enter into contracts in the normal course of business with third party contract organizations for clinical trials, non-clinical studies and testing, manufacturing, and other services and products for operating purposes. The amount and timing of the payments under these contracts varies based upon the timing of the services. We have recorded accrued expense of approximately $1.0 million in our condensed consolidated balance sheet for expenditures incurred by these vendors as of June 30, 2024. We have approximately $29.6 million in cancellable future operating expense commitments based on existing contracts as of June 30, 2024. These obligations will be satisfied in the normal course of business, but generally no longer than 12 months. As of June 30, 2024, the fair value of the EIB loan is $13.8 million and it is recorded as long-term debt on the condensed consolidated balance sheet at fair value. As of June 30, 2024, the fair value of long-term contingent consideration on our books for the earnout related to the EryDel Acquisition is $57.5 million and the short-term portion is $5.0 million, refer to Note 3 to the condensed consolidated financial statements for further details.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The costs for EryDex development increased by $2.9 million in the three months ended June 30, 2024 compared to the same period from the prior year due to the start-up costs related to the Phase 3 NEAT clinical trial. This increase was primarily due to clinical trial costs of $2.6 million and $0.3 million increase in manufacturing costs.
Current report — wording carried from elsewhere
Interest income increased by $18.0 thousand for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The change was due to increased yields on our investment portfolio which were offset by decreased average balances.
Current report — wording carried from elsewhere
The following sets forth our results of operations for the six months ended June 30, 2024 and 2023 (in thousands, except for percentages):
Current report — wording carried from elsewhere
Research and Development Expenses(in thousands, except for percentages):
Current report — wording carried from elsewhere
We recorded $67.0 thousand of tax expense for the six months ended June 30, 2024 and tax benefit of $248,000 for the six months ended June 30, 2023. The change is primarily related to foreign withholding tax, interest on uncertain tax position liability and net of tax benefit from decrease in EryDel's deferred tax liabilities.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
RCL. The RCL, EryKit, and Syringe Kit have been CE marked in accordance with the MDR. Process solutions (Hypotonic Solution 1&2 and Hypertonic Solution PIGPA) are proprietary sterile solutions, CE marked according to the MDD, aimed to create suitable osmotic condition during the process to allow the drug diffusion into red blood cells and the subsequent restoring of physiological condition.
Previous report — wording carried elsewhere
Fair Value Adjustment for Contingent Consideration
Previous report — wording carried elsewhere
Fair Value Adjustment for Long-term Debt
Previous report — wording carried elsewhere
Fair Value Adjustment for Contingent Consideration
Previous report — wording carried elsewhere
Fair Value Adjustment for Long-term Debt