Tarsus Pharmaceuticals, Inc.

Previous wording

•our estimates of the number of patients in the United States ("U.S.") or globally, as applicable, who suffer from Demodex blepharitis, rosacea, Lyme disease and malaria and the number of patients that will enroll in our clinical trials;

Current wording

•our estimates of the number of patients in the United States ("U.S.") or globally, as applicable, who suffer from Demodex blepharitis, ocular rosacea, Lyme disease and malaria and the number of patients that will enroll in our clinical trials;

Previous wording

To date, we have completed seven clinical trials that include a Phase 3 Saturn-2 trial, a Phase 2b/3 Saturn-1 trial, four Phase 2 trials, and a Phase 1 trial for XDEMVY in Demodex blepharitis, all of which met their primary, secondary and/or certain exploratory endpoints, with the drug well tolerated throughout each trial. We have also completed, and/or have ongoing clinical trials for the potential treatment of Demodex blepharitis in patients with Meibomian Gland Disease ("MGD") including the Ersa clinical trial involving XDEMVY, and the Rhea clinical trial involving an XDEMVY vehicle; TP-04 for the potential treatment of Ocular Rosacea, and TP-05 for potential Lyme disease prophylaxis, among others.

Current wording

To date, we have completed seven clinical trials that include a Phase 3 Saturn-2 trial, a Phase 2b/3 Saturn-1 trial, four Phase 2 trials, and a Phase 1 trial for XDEMVY in Demodex blepharitis, all of which met their primary, secondary and/or certain exploratory endpoints, with the drug well tolerated throughout each trial. We have also completed clinical trials in Demodex blepharitis patients with Meibomian Gland Disease ("MGD") including the Ersa clinical trial involving XDEMVY (the "Ersa Trial"), and the Rhea clinical trial involving an XDEMVY vehicle (the "Rhea Trial"), all of which met their primary, secondary, and/or certain exploratory endpoints, with the drug well tolerated throughout each trial.

Previous wording

We intend to further advance our pipeline with the lotilaner API to address several diseases in human medicine, including eye care, and infectious disease prevention. We are investigating the development of our product candidates to address targeted diseases with high unmet medical needs, which currently include TP-04, a novel gel formulation of lotilaner for the potential treatment of Ocular Rosacea and TP-05, a novel investigational oral formulation of lotilaner, for potential Lyme disease prophylaxis and community malaria reduction.

Current wording

We intend to further advance our pipeline with, e.g., the lotilaner API to address several diseases in human medicine, including eye care, and infectious disease prevention. We are investigating the development of our product candidates to address targeted diseases with high unmet medical needs, which currently include TP-04, an investigational sterile aqueous gel formulation of lotilaner for the potential treatment of ocular rosacea and TP-05, an investigational oral systemic formulation of lotilaner, for potential Lyme disease prophylaxis and community malaria reduction.

Previous wording

•XDEMVY is on track to potentially be one of the fastest growing and best-selling anterior segment medicines. During the first quarter of 2025, the Company:

Current wording

•XDEMVY is one of the fastest growing and best-selling launches in the prescription eye drop segment. During the second quarter of 2025, the Company:

Previous wording

◦Dispensed approximately 72,000 bottles of XDEMVY to patients, an increase of 23% compared to the fourth quarter of 2024.

Current wording

◦Dispensed approximately 91,000 bottles of XDEMVY to patients.

Previous wording

•Broad commercial, Medicare, and Medicaid reimbursement of XDEMVY now extends to more than 90% of covered lives.

Current wording

◦Obtained broader commercial, Medicare, and Medicaid reimbursement of XDEMVY for more than 90% of covered lives.

Previous wording

◦Recognized a gross-to-net discount of approximately 47% in the first quarter of 2025.

Current wording

◦Recognized a gross-to-net discount of approximately 45%.

Previous wording

TP-03 Demodex blepharitis in patients with Meibomian Gland Disease, Ersa and Rhea Trials

Current wording

TP-03 Demodex blepharitis in patients with MGD, Ersa and Rhea Trials:

Previous wording

In December 2023, we announced positive topline results of the Ersa trial evaluating XDEMVY administered twice daily ("BID") or three times a day ("TID") for 6 weeks and 12 weeks for the treatment of MGD in patients with Demodex mites. XDEMVY demonstrated statistically significant and clinically meaningful improvements compared to baseline in two objective measures of the disease: the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; and the number of glands secreting normal or clear liquid. In November 2024, additional positive data was presented from the Ersa trial as well as data from the Rhea trial, a pilot study evaluating XDEMVY vehicle for the treatment of MGD in patients with Demodex mites, at the American Academy of Optometry ("AAOpt") Annual Meeting 2024, and in April 2025 at the American Society of Cataract and Refractive Surgery ("ASCRS") Annual Meeting 2025. The Rhea trial enrolled a similar patient population as Ersa, and evaluated the same outcomes, with the same dosing regimens, except the Rhea trial participants received XDEMVY vehicle. Both the Ersa and Rhea trials also assessed patient reported outcomes for some of the most commonly reported patient symptoms in Demodex blepharitis and MGD, namely fluctuating vision, itching, redness, and burning.

Current wording

In December 2023, we announced positive topline results of the Ersa Trial evaluating XDEMVY administered twice daily ("BID") or three times a day ("TID") for 6 weeks and 12 weeks for the treatment of MGD in patients with Demodex mites. XDEMVY demonstrated statistically significant and clinically meaningful improvements compared to baseline in two objective measures of the disease: the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; and the number of glands secreting normal or clear liquid. In November 2024, additional positive data was presented from the Ersa Trial as well as data from the Rhea Trial, a pilot study evaluating XDEMVY vehicle for the treatment of MGD in patients with Demodex mites, at the American Academy of Optometry ("AAOpt") Annual Meeting 2024, and in April 2025 at the American Society of Cataract and Refractive Surgery ("ASCRS") Annual Meeting 2025. The Rhea Trial enrolled a similar patient population as the Ersa Trial, and evaluated the same outcomes, with the same dosing regimens, except the Rhea Trial participants received XDEMVY vehicle. Both the Ersa and Rhea Trials also assessed patient reported outcomes for some of the most commonly reported patient symptoms in Demodex blepharitis and MGD, namely fluctuating vision, itching, redness, and burning.

Previous wording

The presentations, which combined the Ersa and Rhea trials data in a pooled analysis, demonstrated that XDEMVY provided statistically significant and clinically meaningful improvements of the meibomian glands from baseline and when compared to vehicle, including at least three times more glands secreting normal or clear liquid in patients treated with XDEMVY compared to vehicle at day 43. These improvements were shown across three objective measures of MGD: 1) the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; 2) the number of glands secreting normal or clear liquid; and 3) the number of glands yielding any liquid. Improvements were also demonstrated across certain patient reported outcomes, including fluctuating vision, itching and redness. Further, XDEMVY demonstrated statistically significant rates of collarette cure and lid margin erythema cure that are consistent with previous XDEMVY studies. No statistically significant differences were observed between the BID and TID treatment arms in both the Ersa and Rhea trials, respectively, and XDEMVY and the XDEMVY vehicle were well tolerated. Given the positive results of these trials, plus the FDA’s feedback that these patients are already covered under XDEMVY’s label for the treatment of Demodex blepharitis, our medical affairs team is moving forward with sharing this data with ECPs.

Current wording

The presentations, which combined the Ersa and Rhea Trials data in a pooled analysis, demonstrated that XDEMVY provided statistically significant and clinically meaningful improvements of the meibomian glands from baseline and when compared to vehicle, including at least three times more glands secreting normal or clear liquid in patients treated with XDEMVY compared to vehicle at day 43. These improvements were shown across three objective measures of MGD: 1) the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; 2) the number of glands secreting normal or clear liquid; and 3) the number of glands yielding any liquid. Improvements were also demonstrated across certain patient reported outcomes, including fluctuating vision, itching and redness. Further, XDEMVY demonstrated statistically significant rates of collarette cure and lid margin erythema cure that are consistent with previous XDEMVY studies. No statistically significant differences were observed between the BID and TID treatment arms in both the Ersa and Rhea Trials, respectively, and XDEMVY and the XDEMVY vehicle were well tolerated. Given the positive results of these trials, plus the FDA’s feedback that these patients are already covered under XDEMVY’s label for the treatment of Demodex blepharitis, our medical affairs team is continuing to move forward with sharing this data with ECPs.

Previous wording

In February 2024, we announced positive topline results from the Galatea trial, a Phase 2a trial evaluating TP-04, a novel gel formulation of lotilaner, for the treatment of rosacea. The positive topline results demonstrated statistically significant improvements (p<0.05) in inflammatory lesions and Investigator's Global Assessment score (change in baseline and success rate) were observed compared to vehicle at week 12. TP-04 was generally well tolerated. After review of this data with the FDA and Key Opinion Leaders, we decided to pursue development of TP-04 for the potential treatment for Ocular Rosacea, a highly prevalent and underserved eye disease with no FDA-approved therapy. In January 2025, we announced plans to initiate a Phase 2 study in the second half of 2025 for the potential treatment of Ocular Rosacea, which remains on track.

Current wording

In February 2024, we announced positive topline results from the Galatea trial, a Phase 2a trial evaluating TP-04, an investigational sterile aqueous gel formulation of lotilaner, for the treatment of rosacea (the "Galatea Trial"). The positive topline results demonstrated statistically significant improvements (p<0.05) in inflammatory lesions and Investigator's Global Assessment score (change in baseline and success rate) were observed compared to vehicle at week 12. TP-04 was generally well tolerated. After review of this data with the FDA and key opinion leaders, we decided to pursue development of TP-04 for the potential treatment for ocular rosacea, a highly prevalent and underserved eye disease with no FDA-approved therapy. In January 2025, we announced plans to initiate a Phase 2 study in the second half of 2025 for the potential treatment of ocular rosacea, which remains on track.

Previous wording

In February 2024, we announced positive topline results from the Carpo trial, which demonstrated statistical significance in the mortality of ticks compared to vehicle (p<0.001), regardless of treatment arm, and was well tolerated. The Carpo trial is designed to evaluate TP-05, a novel investigational oral, non-vaccine pharmacological prophylactic for the potential prevention of Lyme disease in humans. The Carpo trial evaluated the efficacy of TP-05 in killing lab grown, non-disease carrying ticks after they have attached to the skin of healthy volunteers, as well as confirm the safety, tolerability, and blood concentration of TP-05.

Current wording

In February 2024, we announced positive topline results from the Carpo trial, which demonstrated statistical significance in the mortality of ticks compared to vehicle (p<0.001), regardless of treatment arm, and was well tolerated (the "Carpo Trial"). The Carpo Trial is designed to evaluate TP-05, an investigational oral systemic, non-vaccine pharmacological prophylactic for the potential prevention of Lyme disease in humans. The Carpo Trial evaluated the efficacy of TP-05 in killing lab grown, non-disease carrying ticks after they have attached to the skin of healthy volunteers, as well as confirm the safety, tolerability, and blood concentration of TP-05.

Previous wording

In December 2024, we met with the FDA about our Lyme disease program. The FDA agreed to our proposed approach for a Phase 2b clinical trial of TP-05 (an investigational oral tablet), which would include several hundred subjects with trial initiation expected in 2026. Additionally, the FDA confirmed that a Phase 3 clinical study would require a disease prevention field study that would likely require the enrollment of thousands of patients. We continue to believe that the best approach to get this potential prophylactic therapy to patients is to partner this program either prior to the initiation of the Phase 2b study or after the completion of the study.

Current wording

In December 2024, we met with the FDA about our Lyme disease program. The FDA agreed to our proposed approach for a Phase 2b clinical trial of TP-05 (an investigational oral tablet), which would include several hundred subjects with planned trial initiation expected sometime in 2026. Additionally, the FDA confirmed that a Phase 3 clinical study would require a disease prevention field study that would likely require the enrollment of thousands of patients. We continue to believe that the best approach to get this potential prophylactic therapy to patients is to partner this program either prior to the planned initiation of the Phase 2b study or after the completion of the study.

Previous wording

We believe we are on track for potential European regulatory approval in 2027 of a preservative-free formulation of XDEMVY for the potential treatment of Demodex blepharitis.

Current wording

We believe we are on track for potential European regulatory approval expected in 2027, for a preservative-free formulation of XDEMVY for the potential treatment of Demodex blepharitis.

Previous wording

In Japan, we expect to share results from a Demodex blepharitis prevalence study (the "Elara study") in the first half of 2025 and meet with Japanese regulatory authorities in the second half of 2025 to help determine a regulatory path forward. The Elara study showed the high prevalence and significant impact of Demodex blepharitis in Japan, consistent with the U.S.

Current wording

In Japan, we plan to meet with regulatory authorities in the second half of 2025 to help determine a regulatory path forward for Demodex blepharitis. The Elara prevalence study showed high prevalence and significant impact of Demodex blepharitis in Japan, consistent with U.S. findings.

Previous wording

We have incurred significant net operating losses ("NOLs") in every year since our inception and expect to continue to incur significant operating expenses as we commercialize XDEMVY for Demodex blepharitis and as we advance our other product candidates through clinical trials, regulatory submissions, and potential commercialization. Our net losses were $25.1 million and $35.7 million for the three months ended March 31, 2025 and 2024, respectively. Our net losses may fluctuate significantly from quarter to quarter and year to year and could be substantial. We anticipate that our operating expenses will increase significantly as we:

Current wording

We have incurred significant net operating losses ("NOLs") in every year since our inception and expect to continue to incur significant operating expenses as we commercialize XDEMVY for Demodex blepharitis and as we advance our other product candidates through clinical trials, regulatory submissions, and potential commercialization. Our net losses were $20.3 million and $33.3 million for the three months ended June 30, 2025 and 2024, respectively, and $45.6 million and $69.0 million for the six months ended June 30, 2025 and 2024, respectively. Our net losses may fluctuate significantly from quarter to quarter and year to year and could be substantial. We anticipate that our operating expenses will increase significantly as we:

Previous wording

As of March 31, 2025, our aggregate cash, cash equivalents and marketable securities was $407.9 million – see the section below titled "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources."

Current wording

As of June 30, 2025, our aggregate cash, cash equivalents and marketable securities was $381.1 million – see the section below titled "Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources."

Previous wording

During the three months ended March 31, 2025 and 2024 we recognized revenue of $78.3 million and $24.7 million, respectively, from product sales, net of rebates, chargebacks, discounts, and other adjustments driven by approximately 72,000 bottles of XDEMVY delivered to patients compared to 26,000 bottles delivered in the prior year period.

Current wording

During the three months ended June 30, 2025 and 2024, we recognized revenue of $102.7 million and $40.8 million, respectively, from product sales, net of rebates, chargebacks, discounts, and other adjustments driven by approximately 91,000 bottles of XDEMVY delivered to patients compared to 37,000 bottles delivered in the prior year period.

Previous wording

Research and development expenses increased by $2.3 million for the three months ended March 31, 2025, as compared to the prior year period. The increase was primarily due to (i) $0.5 million of increased TP-04 program expenses, (ii) $0.9 million of increased payroll and personnel-related costs (including a slight increase in stock-based compensation expense) related to employee additions to drive our product development initiatives, (iii) $0.9 million of increased early-stage programs, and (iv) $0.3 million of increased other indirect expenses. These increases were partially offset by $0.4 million of decreased TP-03 program expenses.

Current wording

Research and development expenses increased by $3.3 million for the three months ended June 30, 2025, as compared to the prior year period. The increase was primarily due to (i) $0.8 million of increased TP-04 program expenses, (ii) $1.3 million of increased payroll and personnel-related costs (including a slight increase in stock-based compensation expense) related to employee additions to drive our product development initiatives, (iii) $1.0 million of increased early-stage programs, and (iv) $0.3 million of increased other indirect expenses. These increases were partially offset by $0.2 million of decreased TP-03 program expenses.

Previous wording

Selling, general and administrative expenses increased by $33.4 million for the three months ended March 31, 2025, as compared to the prior year period. The increase was primarily due to (i) $9.6 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $1.4 million) for commercial and corporate employee additions to support our business growth and commercial leadership hires for XDEMVY, and (ii) $25.6 million of increased commercial and marketing costs, including direct-to-consumer advertising costs, as we continued our commercial expansion of XDEMVY. The increases were partially offset by $1.9 million of decreased information technology applications, legal, professional and other corporate expenses. We expect increased vendor expenses in 2025 given further growth and expansion of our commercial activities for XDEMVY and other corporate initiatives.

Current wording

Selling, general and administrative expenses increased by $44.2 million for the three months ended June 30, 2025, as compared to the prior year period. The increase was primarily due to (i) $7.1 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $0.7 million) for commercial and corporate employee additions to support our business growth and commercial leadership hires for XDEMVY, (ii) $30.2 million of increased commercial and marketing costs, including DTC advertising costs, as we continued our commercial expansion of XDEMVY and (iii) $6.9 million of increased information technology applications, legal, professional and other corporate expenses. We expect increased vendor expenses in 2025 given further growth and expansion of our commercial activities for XDEMVY and other corporate initiatives.

Previous wording

During the three months ended March 31, 2025 we did not recognize any license fees and collaboration revenue. During the three months ended March 31, 2024, we recognized $2.9 million of license fees and collaboration revenue related to the China Out-License including $2.5 million for a termination payment and $0.4 million for a warrant termination payment (see Note 9).

Current wording

During the six months ended June 30, 2025, we did not recognize any license fees and collaboration revenue. During the six months ended June 30, 2024, we recognized $2.9 million of license fees and collaboration revenue including (i) $2.5 million for a termination payment related to the Novation Agreement, and (ii) $0.4 million for a warrant termination payment (see Note 9).

Previous wording

For the three months ended March 31, 2025 and 2024, we recognized $5.2 million and $1.7 million, respectively, in cost of sales for XDEMVY. Cost of sales consists of direct and indirect costs related to the manufacturing and distribution of XDEMVY, including raw materials, third-party manufacturing costs, packaging services, freight-in, third-party royalties payable on our product sales, net, and amortization of capitalized intangible assets associated with XDEMVY.

Current wording

For the six months ended June 30, 2025 and 2024, we recognized $11.4 million and $4.7 million, respectively, in cost of sales of XDEMVY. Cost of sales consists of direct and indirect costs related to the manufacturing and distribution of XDEMVY, including raw materials, third-party manufacturing costs, packaging services, and freight-in, as well as third-party royalties payable on our product sales, net and amortization of capitalized intangible assets associated with XDEMVY.

Previous wording

Other income (expense), net decreased by $0.8 million compared to the prior year period primarily due to $1.2 million of increased interest expense related to the Credit Facilities, partially offset by $0.3 million of increased interest income earned on our cash, cash equivalents and marketable securities and $0.1 million of other miscellaneous income.

Current wording

Other income (expense), net increased by $1.0 million primarily due to a $1.9 million loss on debt extinguishment related to the 2022 Credit Facility (see Note 10), which was recognized in the prior year period and $0.4 million of increased interest income earned on our cash, cash equivalents and marketable securities, partially offset by $1.4 million of increased interest expense related to the Credit Facilities.

Previous wording

Since our inception, we have financed our operations substantially through private placements of preferred stock, net proceeds from the issuance of common stock through our IPO, Follow-on Public Offerings, and the 2023 ATM Prospectus, as well as proceeds from product sales, net, the China Out-License, and drawdowns from our Credit Facilities. As of March 31, 2025, we had cash, cash equivalents and marketable securities of $407.9 million.

Current wording

Since our inception, we have financed our operations substantially through private placements of preferred stock, net proceeds from the issuance of common stock through our IPO, Follow-on Public Offerings, and the 2023 ATM Prospectus, as well as proceeds from product sales, net, the China Out-License, and drawdowns from our Credit Facilities. As of June 30, 2025, we had cash, cash equivalents and marketable securities of $381.1 million.

Previous wording

In April 2024, we executed the 2024 Credit Facility with Pharmakon with maturity in April 2029. The 2024 Credit Facility is collateralized by substantially all of our presently existing and subsequently acquired assets. Upon execution, we made a $75.0 million draw from the initial tranche, a portion of which was utilized to repay all outstanding indebtedness associated with the 2022 Credit Facility, for total net proceeds of $39.6 million. The 2024 Credit Facility provided for three potential additional term loan tranches in principal amounts up to $25.0 million, $50.0 million, and $50.0 million, respectively, subject to customary conditions to funding and, in the case of the last two tranches, achieving minimum net sales milestones. We did not draw on the first additional tranche of $25.0 million, which expired on December 31, 2024. The two additional tranches may be requested at our option on or prior to June 30, 2025 and December 31, 2025, respectively.

Current wording

In April 2024, we executed the 2024 Credit Facility with Pharmakon with maturity in April 2029. The 2024 Credit Facility is collateralized by substantially all of our presently existing and subsequently acquired assets. Upon execution, we made a $75.0 million draw from the initial tranche, a portion of which was utilized to repay all outstanding indebtedness associated with the 2022 Credit Facility, for total net proceeds of $39.6 million. The 2024 Credit Facility provided for three potential additional term loan tranches in principal amounts up to $25.0 million, $50.0 million, and $50.0 million, respectively, subject to customary conditions to funding and, in the case of the last two tranches, achieving minimum net sales milestones, which have been met. We did not draw on the first or second additional tranches of $25.0 million and $50,0 million, respectively, each of which expired on December 31, 2024 and June 30, 2025. The one remaining $50.0 million tranche may be requested at our option on or prior to December 31, 2025.

Previous wording

Our operating expenditures currently consist of cost of sales, research and development costs (including activities within our preclinical, clinical, regulatory, and drug manufacturing initiatives) and selling, general and administrative costs. Our use of cash is impacted by the timing and extent of payments for each of these activities and other business requirements. We have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $385.3 million and $360.2 million as of March 31, 2025 and December 31, 2024, respectively.

Current wording

Our operating expenditures currently consist of cost of sales, research and development costs (including activities within our preclinical, clinical, regulatory, and drug manufacturing initiatives) and selling, general and administrative costs. Our use of cash is impacted by the timing and extent of payments for each of these activities and other business requirements. We have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $405.7 million and $360.2 million as of June 30, 2025 and December 31, 2024, respectively.

Previous wording

We believe our cash, cash equivalents and marketable securities of $407.9 million as of March 31, 2025, is sufficient to fund our current and planned operations for at least the next twelve months from the date of filing this Quarterly Report on Form 10-Q. We have additional availability from our 2024 Credit Facility of $100.0 million contingent on reaching certain sales milestones. Our cash runway estimate is predicated on current assumptions for future revenue, operating expenses, and debt availability and may require future adjustments. Accordingly, we may be required to raise additional capital earlier than we currently expect based on our cash requirements and market dynamics.

Current wording

We believe our cash, cash equivalents and marketable securities of $381.1 million as of June 30, 2025, is sufficient to fund our current and planned operations for at least the next twelve months from the date of filing this Quarterly Report on Form 10-Q. We have additional availability from our 2024 Credit Facility of $50.0 million contingent on reaching certain sales milestones. Our cash runway estimate is predicated on current assumptions for future revenue, operating expenses, and debt availability and may require future adjustments. Accordingly, we may be required to raise additional capital earlier than we currently expect based on our cash requirements and market dynamics.

Previous wording

In November 2023, we filed a shelf registration statement on Form S-3 that was declared effective by the SEC on November 21, 2023, (the "2023 Shelf Registration Statement"), and as part of the 2023 Shelf Registration Statement, we concurrently filed the 2023 ATM Prospectus with Jefferies. The 2023 ATM Prospectus covers the sale of up to $100.0 million of our common stock pursuant to an Open Market Sales Agreement TM we entered into with Jefferies in 2021 (the "ATM Sales Agreement"). Under the terms of the 2023 ATM Prospectus and ATM Sales Agreement, Jefferies will act as the Company's sales agent and is entitled to compensation for its services equal to 3% of the gross proceeds of any shares of common stock sold. In December 2023, we sold 1,000,000 shares of our common stock under the 2023 ATM Prospectus for $20.00 per share and received net proceeds of $19.2 million, after deducting broker commission and offering-related expenses. We have not sold any shares of our common stock under the 2023 ATM Prospectus during the three months ended March 31, 2025 or the year ended December 31, 2024.

Current wording

In November 2023, we filed a shelf registration statement on Form S-3 that was declared effective by the SEC on November 21, 2023, (the "2023 Shelf Registration Statement"), and as part of the 2023 Shelf Registration Statement, we concurrently filed the 2023 ATM Prospectus with Jefferies. The 2023 ATM Prospectus covers the sale of up to $100.0 million of our common stock pursuant to an Open Market Sales Agreement TM we entered into with Jefferies in 2021 (the "ATM Sales Agreement"). Under the terms of the 2023 ATM Prospectus and ATM Sales Agreement, Jefferies will act as the Company's sales agent and is entitled to compensation for its services equal to 3% of the gross proceeds of any shares of common stock sold. In December 2023, we sold 1,000,000 shares of our common stock under the 2023 ATM Prospectus for $20.00 per share and received net proceeds of $19.2 million, after deducting broker commission and offering-related expenses. We have not sold any shares of our common stock under the 2023 ATM Prospectus during the six months ended June 30, 2025 and 2024.

Previous wording

Net cash used in operating activities was $20.7 million for the three months ended March 31, 2025, which primarily consisted of a net loss of $25.1 million and a net decrease in net operating assets and liabilities of $1.9 million, partially offset by net increases in non-cash and other charges of $6.4 million. The decrease in net operating assets and liabilities were primarily due to cash decreases in accounts receivable of $15.7 million and accrued payroll and benefits of $5.9 million, partially offset by cash increases including $11.3 million of accounts payable and other accrued liabilities and $8.7 million of prepaid expenses. The increase in net non-cash and other charges were primarily related to stock-based compensation expense of $6.9 million and amortization of intangible assets and depreciation of property, plant and equipment totaling $0.5 million, partially offset by net amortization/accretion of marketable securities of $1.3 million.

Current wording

Net cash used in operating activities was $50.0 million for the six months ended June 30, 2025, which primarily consisted of a net loss of $45.5 million and a net decrease in operating assets and liabilities of $18.3 million, partially offset by net increases in non-cash and other charges of $13.7 million. The decrease in net operating assets and liabilities were primarily due to cash decreases in prepaid expenses of $14.4 million, accounts receivable of $11.6 million, accrued payroll and benefits of $4.2 million and inventories of $1.3 million, partially offset by a cash increase of $13.6 million of accounts payable and other accrued liabilities. The increase in net non-cash and other charges were primarily related to stock-based compensation expense of $15.2 million and amortization of intangible assets and depreciation of property, plant and equipment totaling $0.9 million, partially offset by net amortization/accretion of marketable securities of $3.0 million.

Previous wording

Net cash used in operating activities was $37.8 million for the three months ended March 31, 2024, which primarily consisted of a net loss of $35.7 million and a net decrease in net operating assets and liabilities of $8.6 million, partially offset by net increases in non-cash and other charges of $6.5 million. The net decrease in net operating assets and liabilities were primarily due to an increase in accounts receivable of $13.3 million and a decrease in accrued payroll and benefits of $7.3 million, partially offset by an increase in accounts payable and other accrued liabilities of $12.3 million. The net non-cash and other charges were primarily related to stock-based compensation expense of $5.5 million and unrealized loss on equity investments of $0.6 million.

Current wording

Net cash used in operating activities was $52.2 million for the six months ended June 30, 2024, which primarily consisted of a net loss of $69.0 million, partially offset by a net increase in net operating assets and liabilities of $1.7 million and a net increase in non-cash and other charges of $15.2 million. The increase in net operating assets and liabilities was primarily due to an increase in accounts payable and other accrued liabilities of $19.4 million and a decrease in prepaid expenses of $1.8 million, partially offset by cash decreases including $12.9 million of accounts receivable, $5.2 million of accrued payroll and benefits, and $1.6 million of inventory. The net non-cash and other charges were primarily related to stock-based compensation expense of $13.0 million and a loss on debt extinguishment of $1.9 million.

Previous wording

Net cash used in investing activities was $34.9 million for the three months ended March 31, 2025, and primarily related to $125.6 million of purchased marketable securities and $0.6 million of purchased property, plant and equipment. These cash decreases were partially offset by $91.2 million of proceeds from sales and maturities of marketable securities.

Current wording

Net cash used in investing activities was $86.6 million for the six months ended June 30, 2025, and related to $255.3 million of purchased marketable securities and $1.6 million of purchased property, plant and equipment. These cash decreases were partially offset by $170.2 million of proceeds from maturities of marketable securities.

Previous wording

Net cash used in investing activities was $102.2 million for the three months ended March 31, 2024, and primarily related to $104.6 million of purchased marketable securities and $0.2 million of purchased property, plant and equipment, partially offset by $2.5 million of proceeds from maturities of marketable securities.

Current wording

Net cash used in investing activities was $142.7 million for the six months ended June 30, 2024, and related to $151.6 million of purchased marketable securities, $3.0 million of purchased long-term investments, and $1.2 million of purchased property, plant and equipment, partially offset by $13.0 million of proceeds from maturities of marketable securities.

Previous wording

Net cash provided by financing activities was $108.8 million for the three months ended March 31, 2024, which primarily related to $98.6 million of net proceeds from the issuance of common stock and $9.4 million of net proceeds from the issuance of pre-funded warrants related to the March 2024 Public Offering, and $0.8 million of proceeds from employee stock option exercises.

Current wording

Net cash provided by financing activities was $138.5 million for the six months ended June 30, 2025, and related to $134.8 million of net proceeds from the issuance of common stock in the March 2025 Public Offering, $2.6 million of proceeds from employee stock option exercises and $1.1 million of proceeds from the issuance of common stock for our employee stock purchase plan ("ESPP").