Shattuck Labs Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
STTK$4.62+2.9%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 2024-08-01.
0001680367-24-000040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001680367-24-000053
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 114 previous paragraphs and 108 current paragraphs.
70 unchanged; 26 reworded; 12 added; 16 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 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 (12)
Current report
We are a biotechnology company specializing in the development of potential treatments for inflammatory and immune-mediated diseases and cancer. We are developing a potentially first-in-class antibody for the treatment of inflammatory bowel disease ("IBD") and other inflammatory and immune-mediated diseases. Our expertise in protein engineering and the development of novel tumor necrosis factor ("TNF") receptor agonist and antagonist therapeutics come together in our lead program, SL-325, which we believe could be a first-in-class death receptor 3 ("DR3") antagonist antibody designed to achieve a more complete blockade of the clinically validated TL1A/DR3 pathway.
Current report
SL-325 is a DR3 blocking antibody for the potential treatment of IBD and other inflammatory and immune-mediated diseases. In preclinical studies, SL-325 demonstrated high affinity binding to DR3 and superior potency in comparison to TL1A blocking antibodies. SL-325 blocks the TL1A binding pocket on DR3 and also interferes with trimerization of DR3. We believe that these characteristics, together with underlying biological differences in DR3 and TL1A expression, may provide a more durable blockade of the DR3/TL1A signaling axis compared to TL1A blocking antibodies.
Current report
TL1A is the sole known signaling ligand for DR3, and DR3 is the sole known signaling receptor for TL1A. Thus, we believe that the clinical safety profile of TL1A blocking antibodies generated to date (in clinical trials conducted by other parties) could de-risk the clinical safety profile for our DR3 blocking antibodies. We engineered SL-325 to lack any Fc gamma receptor binding function and SL-325 has not shown any evidence to date of antibody dependent cellular cytotoxicity or cellular phagocytosis, which further derisks the safety profile. In contrast to TL1A, DR3 is constitutively expressed by lymphocytes both in the peripheral blood and in tissues. We have demonstrated that SL-325 binds an epitope on DR3 that does not trigger receptor mediated endocytosis, and binding of SL-325 to DR3 was shown to be highly durable in preclinical assays. Thus, a pharmacodynamic biomarker of SL-325 includes direct observation of DR3 receptor occupancy on peripheral blood lymphocytes, and our pre-clinical studies suggest that blockade will last for weeks to months as a result of the properties of SL-325 and the stable expression of DR3.
Current report
DR3 and TL1A have distinct expression patterns within the small and large intestines of patients with IBD. TL1A is expressed in a pulsatile manner only in actively inflamed areas of the bowel. In contrast, DR3 is highly expressed in both inflamed and adjacent non-inflamed areas of the bowel. The absence of TL1A in non-inflamed areas of the bowel eliminates the mechanism whereby TL1A blocking antibodies would be retained in non-inflamed areas of the bowel. Because bowel inflammation observed in Crohn’s disease and ulcerative colitis can wax and wane in different areas of the bowel, stable blockade of DR3 may reduce the spread of inflammation, and contribute to higher rates of endoscopic remission.
Current report
Initial clinical development of SL-325 is planned for patients with IBD, including ulcerative colitis and Chron’s disease. The clinical success of TL1A blocking antibodies to date suggests that SL-325 will have monotherapy disease modifying activity early in clinical development. We believe that targeting DR3 may be more efficacious than targeting TL1A in patients with IBD. Additionally, the DR3/TL1A axis is implicated in a variety of other inflammatory and immune-mediated diseases. Following initial development in IBD, SL-325 may be developed in other diseases. We expect to file an Investigational New Drug ("IND") application for SL-325 in the third quarter of 2025.
Current report
On September 30, 2024 Shattuck and Ono mutually agreed to terminate the Ono Agreement and Option pursuant to the terms of the agreement. We have completed all obligations under the agreement and have accordingly recognized $5.4 million in revenue pursuant to terms of the Ono Agreement including the $2.0 million paid for the Option. Additionally, in October 2024, the Company refunded a $1.6 million prepayment that was received in August 2024 for additional services to be performed under the Ono Agreement that was terminated before any of the additional services were performed.
Current report
Research and development activities are central to our business model. Product candidates in earlier stages of development generally have lower development costs than those in later stages of development. We have discontinued clinical development of SL-172154 and are no longer conducting research activities performed under the Ono Agreement. We are now focused on the preclinical development of SL-325 and other DR3 targeted assets, and conducting additional research on other potential product candidates. As a result of these operational changes, we expect a decrease in operating expense year-over-year, primarily associated with a reduction in clinical development, manufacturing, and process development costs earmarked to SL-172154 and the reduction in costs associated with our workforce.
Current report
•investment in our pipeline;
Current report
General and administrative expenses decreased by $0.5 million, or (9.2)%, to $4.6 million for the three months ended September 30, 2024 from $5.1 million for the three months ended September 30, 2023 as a result of a decrease in employee related cost.
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Current report
Research and development expenses decreased by $7.3 million, or (12.3)%, to $51.8 million for the nine months ended September 30, 2024 from $59.1 million for the nine months ended September 30, 2023. The decrease in research and development expenses was primarily a result of a decrease in expenses of $9.6 million related to preclinical research activities associated with potential product candidates and a decrease in employee-related costs $2.1 million, partially offset by an increase in the preclinical development activities associated with our DR3 programs, including SL-325, and other potential product candidates and work performed under the Ono agreement of $4.0 million, and an increase in SL-172154 clinical expense of $0.4 million.
Current report
General and administrative expenses remained flat for the nine months ended September 2024 compared to the nine months ended September 2023.
Removed paragraphs (16)
Previous report
We are an innovative clinical-stage biotechnology company pioneering the development of dual-sided fusion proteins as an entirely new class of biologic medicine. We have created a novel approach to immune modulation by designing biologics with structural characteristics that may not be achievable by existing therapeutic modalities, including monoclonal or bispecific antibodies. Our Agonist Redirected Checkpoint (“ARC®”) platform was designed to simultaneously inhibit checkpoint molecules and activate costimulatory molecules with a single therapeutic as a potential treatment for cancer. We also have at varying stages of preclinical development, dual-sided, multifunctional fusion proteins, distinct from our ARC platform, that have therapeutic potential in autoimmune, inflammatory, and cardiometabolic diseases, among other therapeutic areas.
Previous report
Our lead product candidate, SL-172154, is designed to simultaneously inhibit the CD47/SIRPα macrophage checkpoint interaction and activate the CD40 costimulatory receptor to induce an antitumor immune response. Coupling CD40 activation with CD47 inhibition differentiates SL-172154 from all other clinical-stage CD47/SIRPα inhibitors in development, and in our published preclinical studies, SL-172154 resulted in superior antitumor immunity as compared to certain CD47/SIRPα inhibitors.
Previous report
We are evaluating SL-172154 in an ongoing Phase 1B clinical trial for the treatment of patients with certain hematologic malignancies, including acute myeloid leukemia ("AML") and higher risk myelodysplastic syndromes ("HR-MDS"). We believe our clinical development plan may provide both first-in-class and best-in-class development opportunities for SL-172154 in these hematologic indications. In June 2024, at the European Hematology Association 2024 Congress, we shared additional data from our ongoing Phase 1B dose expansion clinical trial in HR-MDS and TP53 mutant ("TP53m") AML. These data showed that SL-172154 in combination with azacitidine improved the rates of both clinical response and complete remission compared to what is expected of azacitidine monotherapy in these indications, and that the safety and tolerability profile was manageable, with no hemolytic anemia observed. We have initiated an additional dose expansion cohort in HR-MDS patients to evaluate SL-172154 in a randomized, controlled, dose optimization cohort to further characterize the efficacy and safety and tolerability of SL-172154 in combination with azacitidine, compared to an azacitidine monotherapy control arm.
Previous report
We are also planning additional studies in both TP53 wild-type ("TP53wt") and TP53m AML patient populations. We plan to initiate a randomized, controlled dose expansion cohort in TP53m AML patients to further evaluate the safety and efficacy of SL-172154 in combination with azacitidine, compared to an azacitidine +/- venetoclax control arm. And, in addition to our ongoing Phase 1B randomized, controlled dose expansion cohorts in HR-MDS and TP53m AML, we have plans to evaluate SL-172154 in patients with TP53wt AML, in combination with azacitidine and venetoclax, which is the standard of care in this indication. Because we have observed objective responses in our studies to date in patients with both TP53m and TP53wt HR-MDS or AML, we believe that SL-172154 may provide clinical benefit for AML patients regardless of TP53 mutation status.
Previous report
Additionally, we believe that SL-172154 may have therapeutic potential in other hematologic indications, including multiple myeloma and myelofibrosis, and we may evaluate SL-172154 in these indications in the future.
Previous report
We believe that data shared to date in human cancer patients demonstrate that the unique protein engineering and physical properties of the ARC platform have led to a differentiated profile in terms of safety and on-target immune activation, demonstrated by unique pharmacodynamic findings, as compared to monoclonal or bispecific antibodies.
Previous report
Further, clinical data generated with our ARC platform has guided our preclinical research efforts to further expand our pipeline, and we are advancing certain potential product candidates through preclinical development. We expect to nominate one or more additional product candidates to our clinical pipeline in the future, potentially for indications outside of oncology, by selecting product candidates where there is an expectation of monotherapy efficacy and where our scientific and protein engineering expertise has led to a product candidate with advantages over current treatment modalities.
Previous report
•continue our process development efforts for our current and future product candidates, including scale up of our Phase 3 and commercial manufacturing process;
Previous report
Under the terms of the Ono Agreement, we have received an initial non-refundable payment of $5.4 million, consisting of a $2.0 million payment for the Option and an initial research funding payment of $3.4 million to cover the expected cost of the first six months of planned activities under the Research Plan. At the conclusion of the first six months, Ono may continue to reimburse nonclinical research activities under the Research Plan, and we may receive up to $7.0 million payable upon the achievement of certain milestones specified in the Research Plan. The Research Plan, which began in March 2024, is currently expected to take up to 18 months to complete, subject to the achievement of research milestones and Ono’s decision to continue reimbursement of our research activities.
Previous report
The Ono Agreement may be terminated by mutual agreement of both parties or by either party upon an uncured material breach of the Ono Agreement or the insolvency of the other party. Ono may terminate the Ono Agreement at any time upon 90 days’ written notice to us. If Ono exercises such termination right, Ono will pay all of our costs up through the date of termination. In addition, after the conditions to exercise the Option have been met, we may terminate the Ono Agreement if Ono discontinues its development or commercialization efforts and other conditions are met.
Previous report
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, including increased demand for clinical trial material. We expect to incur significant research and development expenses throughout 2024 and beyond, including expenses associated with the conduct of the Research Plan pursuant to the Ono Agreement. The completion of our clinical trial in platinum resistant ovarian cancer (“PROC”) does not materially impact our anticipated operating expense or cash burn projections in 2024 as this trial was fully enrolled and we had not yet initiated additional clinical trials in this indication. Further, we are not currently planning to conduct additional clinical development in PROC, in part due to the evolving competitive landscape in this indication. We plan to focus all current later-stage clinical development efforts in AML and HR-MDS due to the strength of the emerging efficacy results in those patient populations, the favorable competitive landscape, and the potential for these indications to provide the fastest path to registration. While it is difficult for us to predict with certainty, we expect increasing year-over-year operating expense over the next several years in the event that we conduct additional nonclinical studies and clinical trials, which may include a material expansion of our existing clinical trials or the initiation of planned, later-stage clinical trials for our current and/or future product candidates, pursue regulatory approval of our product candidates, or advance additional product candidates from our preclinical pipeline.
Previous report
•investment in our clinical programs;
Previous report
General and administrative expenses increased by $0.6 million, or 12.4%, to $5.3 million for the three months ended June 30, 2024 from $4.7 million for the three months ended June 30, 2023. The increase in general and administrative expense was due to an increase in general corporate costs.
Previous report
Comparison of the Six Months Ended June 30, 2024 and 2023
Previous report
Research and development expenses increased by $0.6 million, or 1.8%, to $35.5 million for the six months ended June 30, 2024 from $34.9 million for the six months ended June 30, 2023. The increase in research and development expenses was primarily a result of an increase in SL-172154 cost related to the GMP manufacture of clinical trial material of $2.2 million and cost associated with our clinical trials of $1.6 million partially offset by a decrease of costs related to our preclinical research efforts of $2.6 million and a decrease in employee costs of $0.7 million
Previous report
General and administrative expenses increased by $0.4 million, or 4.4%, to $10.2 million for the six months ended June 30, 2024 from $9.8 million for the six months ended June 30, 2023. The increase in general and administrative expense was due to an increase in general corporate costs.
Reworded paragraphs (26)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes appearing in this Quarterly Report on Form 10-Q, as well as the audited financial statements, notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of our Annual Report on Form 10-K. You should carefully read the “Cautionary Note About Forward-Looking Statements” of this Quarterly Report on Form 10-Q and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023 to gain an understanding of the important factors that could cause actual results to differ materially from the results described below.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes appearing in this Quarterly Report on Form 10-Q, as well as the audited financial statements, notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2023. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section of this Quarterly Report on Form 10-Q. You should carefully read the “Cautionary Note About Forward-Looking Statements” of this Quarterly Report on Form 10-Q and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023 to gain an understanding of the important factors that could cause actual results to differ materially from the results described below.
Previous wording
We maintain a strong research organization that has developed a diverse pipeline of preclinical compounds. The ARC platform was generated based on the goal of linking an immune checkpoint inhibitor to a tumor necrosis factor ("TNF") superfamily ligand. This expertise in TNF ligand and receptor biology provided a basis to develop other potential product candidates to inhibit certain TNF receptors, including death receptor 3 ("DR3"), the cognate binding partner for TL1A. We have developed an antibody that binds to DR3 with high affinity and blocks the interaction with TL1A with reduced DR3 receptor agonism. There are parallels between the improved efficacy associated with blocking PD-1 receptor versus PD-L1, and we believe that targeting DR3 (the receptor) instead of TL1A (the ligand) may provide for better efficacy in certain inflammatory disorders, including inflammatory bowel disease.
Current wording
We maintain a strong research organization that has developed a diverse pipeline of preclinical compounds.
Previous wording
For the six months ended June 30, 2024 and 2023, our net loss was $40.1 million and $42.1 million, respectively. We have not been profitable since inception, and as of June 30, 2024, we had an accumulated deficit of $346.4 million and $105.3 million in cash and cash equivalents and investments. We expect to continue to incur significant expenses and operating losses in the near term in connection with our ongoing activities, as we:
Current wording
For the nine months ended September 30, 2024 and 2023, our net loss was $56.7 million and $69.6 million, respectively. We have not been profitable since inception, and as of September 30, 2024, we had an accumulated deficit of $363.0 million and $90.1 million in cash and cash equivalents and investments. We expect to continue to incur significant expenses and operating losses in the near term in connection with our ongoing activities, as we:
Previous wording
•continue to advance the nonclinical and clinical development of our clinical-stage product candidate, SL-172154;
Current wording
•continue to advance the preclinical development and initiate Phase 1 clinical development of our product candidate, SL-325;
Previous wording
•initiate nonclinical studies and clinical trials for additional product candidates that we may identify in the future;
Current wording
•initiate nonclinical studies and clinical trials for additional product candidates that we may identify in the future, including potential bi-specific DR3 antagonist antibody product candidates;
Previous wording
•retain key personnel and infrastructure to support our clinical development, research and manufacturing efforts;
Current wording
•retain key personnel and infrastructure to support our nonclinical development, research and manufacturing, and future clinical development efforts;
Previous wording
We have no products approved for commercial sale, and we have not generated any revenue from commercial product sales. Our total revenue to date has been generated from our collaboration and research agreements with various third parties. Revenue recognized in 2024 was a result of collaboration agreements with Ono and ImmunoGen, Inc. (“ImmunoGen”).
Current wording
We have no products approved for commercial sale, and we have not generated any revenue from commercial product sales. Our total revenue to date has been generated from our collaboration and research agreements with various third parties. Revenue recognized in 2024 was a result of collaboration agreements with Ono Pharmaceutical Co., Ltd ("Ono") and ImmunoGen, Inc. (“ImmunoGen”).
Previous wording
In February 2024, we entered into the Ono Agreement pursuant to which we and Ono will collaborate in the research and preclinical development of certain compounds selected by Ono from our pipeline of bifunctional fusion proteins directed toward a pair of prespecified targets for potential treatment of autoimmune and inflammatory diseases. Under the terms of the Ono Agreement, we are primarily responsible for carrying out research activities in accordance with a mutually agreed upon research plan (the “Research Plan”), subject to the oversight of a joint research committee, consisting of representatives from each party, and Ono is responsible for all research costs incurred under the Research Plan.
Current wording
In February 2024, we entered into a collaboration and license agreement (the "Ono Agreement") pursuant to which we and Ono collaborated in the research and preclinical development of certain compounds selected by Ono from our pipeline of bifunctional fusion proteins directed toward a pair of prespecified targets for potential treatment of autoimmune and inflammatory diseases. Under the terms of the Ono Agreement, we were primarily responsible for carrying out research activities in accordance with a mutually agreed upon research plan.
Previous wording
Pursuant to the Ono Agreement, we granted Ono an exclusive option (the “Option”) to obtain an exclusive, sublicensable license to further research, develop, manufacture and commercialize products containing these specified bifunctional fusion proteins in any therapeutic area worldwide. The option period will extend from the effective date of the Ono Agreement until 90 days after we deliver our final report pursuant to the Research Plan. If Ono exercises the Option, we may receive licensing, clinical and regulatory, and commercial milestone payments of up to $217.5 million upon the exercise of the option, and the achievement of certain specified clinical, regulatory and commercial milestones, as well as tiered royalty payments on commercial sales ranging from mid-single digit to low-double digit percentages. Royalties are payable by Ono on a licensed product-by-licensed product and country-by-country basis during the product’s royalty term, defined as the period beginning on the first commercial sale of a product and ending on the later of (i) the expiration of the last-to-expire composition of matter claim within applicable product patent rights covering such product in such country, (ii) the expiration of regulatory exclusivity for such product in such country, and (iii) the tenth (10th) anniversary of such first commercial sale of a product in such country.
Current wording
Pursuant to the Ono Agreement, we granted Ono an exclusive option (the “Option”) to obtain an exclusive, sublicensable license to further research, develop, manufacture and commercialize products containing these specified bifunctional fusion proteins in any therapeutic area worldwide.
Previous wording
We completed our obligations under the collaboration agreement with ImmunoGen (the “ImmunoGen Agreement”), and have recognized the remaining deferred revenue pursuant to terms of that agreement as of June 30, 2024.
Current wording
As of September 30, 2024, we completed our obligations under the collaboration agreement with ImmunoGen (the “ImmunoGen Agreement”), and have recognized all revenue pursuant to the terms of that agreement.
Previous wording
•expenses incurred to conduct our clinical trials, including SL-172154 and any potential product candidates we may advance in the future;
Current wording
•expenses incurred to conduct our clinical trials, including expenses associated with clinical trials of SL-172154 and the associated wind-down activities and any potential product candidates we may advance in the future, including SL-325;
Previous wording
•clinical data for our product candidates;
Current wording
•nonclinical data for our product candidates;
Previous wording
We expect that our general and administrative expense may increase in the future to support our ongoing research and development activities and as a result of the costs of operating as a public company. These increases may include increased costs related to the retention of personnel and fees paid to outside consultants, lawyers, and accountants, among other expenses. Additionally, we anticipate that we will continue to incur significant costs associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of Nasdaq and the Securities and Exchange Commission ("SEC"), insurance, and investor relations costs. If any of our current or future product candidates advances to later-stage clinical development or obtains regulatory approval, we expect that we would incur significantly increased expenses associated with building the appropriate general and administrative support for our increased research and development activities, or building a sales and marketing team, respectively.
Current wording
We expect that our general and administrative expense may decrease in the future due to workforce reductions that occurred as a result of discontinuing clinical development of SL-172154. If any of our current or future product candidates advances to clinical development or obtains regulatory approval, we expect that we would incur increased expenses associated with building the appropriate general and administrative support for our increased research and development activities, or building a sales and marketing team, respectively.
Previous wording
Since our inception, we have not recorded any income tax benefits for the net operating losses ("NOLs") we have incurred or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized. Our NOLs and tax credit carryforwards will begin to expire in 2024. We have recorded a full valuation allowance against our deferred tax assets at each balance sheet date.
Current wording
Since our inception, we have not recorded any income tax benefits for the net operating losses ("NOLs") we have incurred or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized. Our NOLs and tax credit carryforwards have begun to expire in 2024. We have recorded a full valuation allowance against our deferred tax assets at each balance sheet date.
Previous wording
Collaboration revenue increased by $1.4 million, or 704.5%, to $1.6 million for the three months ended June 30, 2024 from $0.2 million for the three months ended June 30, 2023. The increase in collaboration revenue was attributable to the research activities conducted pursuant to the Ono Agreement and continued clinical activities pursuant to the ImmunoGen Agreement. As of June 30, 2024 we have completed our obligations under the ImmunoGen Agreement and have recognized all revenue pursuant to that agreement.
Current wording
Collaboration revenue increased by $2.3 million, or 336.9%, to $3.0 million for the three months ended September 30, 2024 from $0.7 million for the three months ended September 30, 2023. The increase in collaboration revenue was attributable to the research activities conducted pursuant to the Ono Agreement and recognition of the $2.0 million Option pursuant to the termination of the Ono Agreement. As of September 30, 2024 we have completed our obligations under the Ono and Immunogen agreements and have recognized all revenue pursuant to those agreements.
Previous wording
Research and development expenses increased by $1.0 million, or 5.7%, to $19.2 million for the three months ended June 30, 2024 from $18.2 million for the three months ended June 30, 2023. The increase in research and development expenses was primarily a result of an increase in SL-172154 cost related to the good manufacturing practice ("GMP") manufacture of clinical trial material of $2.1 million partially offset by decreases in costs related to our preclinical research efforts of $1.3 million.
Current wording
Research and development expenses decreased by $7.9 million, or (32.6)%, to $16.3 million for the three months ended September 30, 2024 from $24.2 million for the three months ended September 30, 2023. The decrease in research and development expenses was primarily a result of a decrease in SL-172154 costs related to the good manufacturing practice ("GMP") manufacture of clinical trial material of $5.1 million, a 3.1 million decrease in our pipeline research, and a decrease in employee-related costs of $1.4 million, partially offset by increased clinical activity for SL-172154 of $1.7 million.
Previous wording
The following table sets forth our results of operations for the six months ended June 30, 2024 and 2023.
Current wording
The following table sets forth our results of operations for the nine months ended September 30, 2024 and 2023.
Previous wording
Collaboration revenue increased by $2.5 million, or 959.9%, to $2.7 million for the six months ended June 30, 2024 from $0.3 million for the six months ended June 30, 2023. The increase in revenue was attributable to research activities performed pursuant to the Ono Agreement and continued clinical activities pursuant to the ImmunoGen Agreement. As of June 30, 2024 we have completed our obligations under the ImmunoGen Agreement and have recognized all revenue pursuant to that agreement.
Current wording
Collaboration revenue increased by $4.8 million, or 506.7%, to $5.7 million for the nine months ended September 30, 2024 from $0.9 million for the nine months ended September 30, 2023. The increase in revenue was primarily attributable to research activities performed pursuant to the Ono Agreement, recognition of the $2.0 million Option pursuant to the termination of the Ono Agreement and continued clinical activities pursuant to the ImmunoGen Agreement. As of September 30, 2024 we have completed our obligations under the Ono and ImmunoGen agreements and have recognized all revenue pursuant to those agreements.
Previous wording
Our primary uses of cash and cash equivalents and investments are to fund our operations, which consist primarily of research and development expenditures related to our programs, product development costs, research expenses, administrative support, capital expenditures related to bringing in-house certain process development and manufacturing capabilities and working capital requirements. We anticipate incurring additional net losses and negative cash flows from operations in the near future until such time, if ever, that we can generate significant sales of our product candidates currently in development. Our future funding requirements will depend on many factors, including:
Current wording
Our primary uses of cash and cash equivalents and investments are to fund our operations, which consist primarily of research and development expenditures related to our programs, product development costs, research expenses, administrative support, and capital expenditures related to bringing in-house certain process development and manufacturing capabilities and working capital requirements. We anticipate incurring additional net losses and negative cash flows from operations in the near future until such time, if ever, that we can generate significant sales of our product candidates currently in development. Our future funding requirements will depend on many factors, including:
Previous wording
During the six months ended June 30, 2024, net cash used in operating activities was $27.1 million and primarily reflected our net loss of $40.1 million, offset by $6.7 million in net changes to our operating assets and liabilities, and net noncash operating charges of $6.3 million for stock-based compensation, depreciation expense, accretion of investments and non-cash operating lease expense. We expect to continue to use cash in our operating activities as we conduct our clinical trials and nonclinical studies, incur costs of manufacturing clinical trial and nonclinical study materials and continue process development activities to optimize our manufacturing processes.
Current wording
During the nine months ended September 30, 2024, net cash used in operating activities was $43.1 million and primarily reflected our net loss of $56.7 million, offset by $4.3 million in net changes to our operating assets and liabilities, and net noncash operating charges of $9.3 million for stock-based compensation, depreciation expense, accretion of investments and non-cash operating lease expense. We expect to continue to use cash in our operating activities as we conduct our clinical trials and nonclinical studies, incur costs of manufacturing clinical trial and nonclinical study materials and continue process development activities to optimize our manufacturing processes.
Previous wording
During the six months ended June 30, 2023, net cash used in operating activities was $45.1 million and primarily reflected our net loss of $42.1 million and an $8.3 million net change in our operating assets and liabilities, offset by noncash charges of $5.2 million in stock-based compensation, depreciation expense, amortization of investments and operating lease expense.
Current wording
During the nine months ended September 30, 2023, net cash used in operating activities was $61.8 million and primarily reflected our net loss of $69.6 million offset by noncash charges of $7.8 million in stock-based compensation, depreciation expense, amortization of investments and operating lease expense.
Previous wording
During the six months ended June 30, 2024, net cash used in investing activities was $38.7 million, as a result of the net change in investments of $38.7 million.
Current wording
During the nine months ended September 30, 2024, net cash used in investing activities was $39.5 million, as a result of the net change in investments of $39.5 million.
Previous wording
During the six months ended June 30, 2023, net cash provided by investing activities was $69.6 million, of which $69.9 million was the net change in investments, offset by $0.4 million in purchases of property and equipment.
Current wording
During the nine months ended September 30, 2023, net cash provided by investing activities was $55.0 million, of which $55.4 million was the net change in investments, offset by $0.4 million in purchases of property and equipment.
Previous wording
During the six months ended June 30, 2024, net cash provided by financing activities was $0.8 million and was primarily from $1.3 million in cash received for the exercise of stock options and purchases pursuant to our employee stock purchase plan offset by taxes paid related to net share settlement of equity awards of $0.4 million.
Current wording
During the nine months ended September 30, 2024, net cash provided by financing activities was $0.9 million and was primarily from $1.3 million in cash received for the exercise of stock options and purchases pursuant to our employee stock purchase plan offset by taxes paid related to net share settlement of equity awards of $0.5 million.
Previous wording
During the six months ended June 30, 2023, minimal cash was provided by financing activities.
Current wording
During the nine months ended September 30, 2023, minimal cash was provided by financing activities.
Previous wording
the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, the accrual for research and development expenses, and the valuation of stock-based awards. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Current wording
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, the accrual for research and development expenses, and the valuation of stock-based awards. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
In February 2024, we entered into a collaboration and license agreement (the “Ono Agreement”) with Ono Pharmaceutical Co., Ltd. (“Ono”) pursuant to which we and Ono will collaborate in the research and preclinical development of certain compounds selected by Ono from our pipeline of bifunctional fusion proteins directed toward a pair of prespecified targets for potential treatment of autoimmune and inflammatory diseases.
Previous report — wording carried elsewhere
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in