Inhibrx Biosciences Inc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report, and our audited consolidated financial statements and notes thereto as of and for the fiscal year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Form 10. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report contain forward-looking statements that involve risk and uncertainties, including those described in the section titled “Special Note Regarding Forward-Looking Statements.” As a result of many factors, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report, and our audited consolidated financial statements and notes thereto as of and for the fiscal year ended December 31, 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Form 10. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report contains forward-looking statements that involve risk and uncertainties, including those described in the section titled “Special Note Regarding Forward-Looking Statements.” As a result of many factors, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

In January 2024, Inhibrx, Inc., or the Former Parent, announced its intent, as approved by its board of directors, to effect the spin-off of INBRX-101, an optimized, recombinant alpha-1 antitrypsin, or AAT, augmentation therapy currently in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency. On May 29, 2024, the Former Parent completed a distribution to holders of its shares of common stock of 92% of the issued and outstanding shares of common stock of the Company, or the Distribution. On May 30, 2024, the Former Parent completed a series of internal restructuring transactions, or the Separation.

Current wording

In January 2024, Inhibrx, Inc., or the Former Parent, announced its intent, as approved by its board of directors, to effect the spin-off of INBRX-101, an optimized, recombinant alpha-1 antitrypsin, or AAT, augmentation therapy in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency. On May 29, 2024, the Former Parent completed a distribution to holders of its shares of common stock of 92% of the issued and outstanding shares of common stock of the Company, or the Distribution. On May 30, 2024, the Former Parent completed a series of internal restructuring transactions, or the Separation.

Previous wording

Our most advanced therapeutic candidate, ozekibart (INBRX-109), is a tetravalent death receptor 5, or DR5, agonist currently being evaluated in patients diagnosed with difficult-to-treat cancers, such as chondrosarcoma, mesothelioma, colorectal cancer, Ewing sarcoma and pancreatic adenocarcinoma.

Current wording

ozekibart (INBRX-109) is a tetravalent death receptor 5, or DR5, agonist currently being evaluated in patients diagnosed with difficult-to-treat cancers, such as chondrosarcoma, mesothelioma, colorectal cancer, Ewing sarcoma and pancreatic adenocarcinoma.

Previous wording

In June 2021, based on the initial Phase 1 data results, we initiated a registration-enabling Phase 2 trial for the treatment of unresectable or metastatic conventional chondrosarcoma for which the United States Food and Drug Administration, or FDA, and the European Medicine Agency, or EMA, granted orphan drug designation in November 2021 and August 2022, respectively. Data from the registration-enabling Phase 2 trial in unresectable or metastatic conventional chondrosarcoma is expected during the middle of 2025.

Current wording

In June 2021, based on the initial Phase 1 data results, we initiated a registration-enabling Phase 2 trial for the treatment of unresectable or metastatic conventional chondrosarcoma for which the United States Food and Drug Administration, or FDA, and the European Medicines Agency, or EMA, granted orphan drug designation in November 2021 and August 2022, respectively. The primary endpoint for this Phase 2 trial is progression-free survival, or PFS. Data from the registration-enabling Phase 2 trial in unresectable or metastatic conventional chondrosarcoma is expected during the middle of 2025.

Previous wording

On November 2, 2023, we announced preliminary efficacy and safety data from the Phase 1 trial of ozekibart (INBRX-109) in combination with Irinotecan, or IRI, and Temozolomide, or TMZ, for the treatment of advanced or metastatic, unresectable Ewing sarcoma. Overall, ozekibart (INBRX-109) in combination with IRI/TMZ was well tolerated from a safety perspective.

Current wording

On November 2, 2023, we announced preliminary efficacy and safety data from the Phase 1 trial of ozekibart (INBRX-109) in combination with Irinotecan, or IRI, and Temozolomide, or TMZ, for the treatment of advanced or metastatic, unresectable Ewing sarcoma. Overall, ozekibart (INBRX-109) in combination with IRI/TMZ was well tolerated from a safety perspective. Based on this preliminary data, the ongoing Phase 1/2 trial in the Ewing sarcoma cohort was expanded. We are also in the process of expanding the cohort for colorectal adenocarcinoma. The data from both of these cohorts is expected during the middle of 2025.

Previous wording

As of June 2024, a seamless Phase 2/3 clinical trial has been initiated for INBRX-106 in combination with Keytruda as a first-line treatment for patients with local advanced recurrent or metastatic head HNSCC. This trial will recruit patients who have not received prior checkpoint inhibitors and whose tumors express a PDL-1 CPS equal to or greater than 20. We plan to enroll approximately 60 patients in the Phase 2 portion with a primary endpoint of ORR supported by secondary endpoints of duration of response, PFS, and safety. We expect to announce initial data on Phase 2 during the second half of 2025. If positive, this data will ungate the Phase 3 portion, where approximately 350 patients will be randomized to INBRX-106 or placebo in combination with Keytruda. The primary endpoint for the Phase 3 portion of the study will be PFS and overall survival.

Current wording

In June 2024, a seamless Phase 2/3 clinical trial was initiated for INBRX-106 in combination with Keytruda as a first-line treatment for patients with local advanced recurrent or metastatic head HNSCC. This trial recruits patients who have not received prior checkpoint inhibitors and whose tumors express a PDL-1 CPS equal to or greater than 20. We plan to enroll approximately 60 patients in the Phase 2 portion with a primary endpoint of ORR supported by secondary endpoints of DOR, PFS, and safety. We expect to announce initial data on Phase 2 during the second half of 2025. If positive, we anticipate this data will ungate the Phase 3 portion, where we expect approximately 350 patients will be randomized to INBRX-106 or placebo in combination with Keytruda. The co-primary endpoints for the Phase 3 portion of the study will be PFS and overall survival.

Previous wording

•salaries, benefits and other related costs, including non-cash stock-based compensation, for personnel engaged in research and development functions;

Current wording

•salaries, benefits and other related costs, including non-cash stock-based compensation under the former Amended and Restated 2017 Employee, Director and Consultant Equity Incentive Plan, or the 2017 Plan, and the 2024 Omnibus Incentive Plan, or the 2024 Plan, for personnel engaged in research and development functions;

Previous wording

•the efficacy and safety profile of our therapeutic candidates; and

Current wording

•the efficacy and safety profile of our therapeutic candidates;

Previous wording

•the uncertainties related to potential economic downturn, geopolitical events and widespread health events on capital and financial markets.

Current wording

•the uncertainties related to potential economic downturn, inflation, interest rates, geopolitical events and widespread health events on capital and financial markets, the supply chain and our expenses; and

Previous wording

•salaries, benefits and other related costs, including non-cash stock-based compensation, for personnel engaged in G&A functions;

Current wording

•salaries, benefits and other related costs, including non-cash stock-based compensation under the former 2017 Plan and 2024 Plan, for personnel engaged in G&A functions;

Previous wording

•expenses incurred in connection with accounting and audit services, legal services, including costs associated with obtaining and maintaining our patent portfolio, investor relations and consulting expenses under agreements with third parties, such as consultants and contractors;

Current wording

•expenses incurred in connection with accounting, audit, and tax services, legal services, including costs associated with obtaining and maintaining our patent portfolio, investor relations and consulting expenses under agreements with third parties, such as consultants and contractors;

Previous wording

We expect our G&A expenses will continue to increase in the future to support our continued research and development activities. We expect increased costs related to pre-commercialization and business development activities, including the hiring of additional personnel as we continue to build our commercial team in preparation for our future product launches. Additionally, we expect other professional service fees to increase, including but not limited to, patent-related costs for filing, prosecution and maintenance of our product candidates, and compliance costs, accounting, legal, investor and public relations and additional personnel.

Current wording

We expect our G&A expenses will continue to increase in the future to support our continued research and development activities. We expect increased costs related to pre-commercialization and business development activities, including the hiring of additional personnel as we continue to build our commercial team in preparation for our future product launches. Additionally, we expect other professional service fees to increase, including but not limited to, patent-related costs for filing, prosecution and maintenance of our therapeutic candidates, and compliance costs, accounting, legal, regulatory and tax-related services, investor and public relations and additional personnel.

Previous wording

License fee revenue during the three months ended June 30, 2024 was $0.1 million and consisted of revenue related to our Option and License Agreement with Regeneron Pharmaceuticals, Inc., or the 2020 Regeneron Agreement, which we recognized following granting a six-month extension of the option term. License fee revenue during the three months ended June 30, 2023 was $30,000 and consisted of revenue related to a former option agreement which was completed during 2023.

Current wording

License fee revenue during the three months ended September 30, 2023 was $0.1 million and consisted of revenue related to a former option agreement which was completed during 2023. We did not recognize any revenue during the three months ended September 30, 2024.

Previous wording

Research and development expenses increased by $33.5 million from $34.1 million during the three months ended June 30, 2023 to $67.6 million during the three months ended June 30, 2024. The overall increase was primarily due to the following factors:

Current wording

Research and development expenses increased by $0.8 million from $38.1 million during the three months ended September 30, 2023 to $38.9 million during the three months ended September 30, 2024. The overall increase was primarily due to the following factors:

Previous wording

•offset in part by clinical trial expense which decreased by $3.7 million, primarily due to decreased expenses incurred following the termination of our INBRX-105 program, which we announced during the first quarter of 2024 and the spin-off of our INBRX-101 program, which occurred during the second quarter of 2024.

Current wording

•clinical trial expense increased by $2.8 million, primarily due to the expansion of our ongoing registration-enabling Phase 2 trial for ozekibart (INBRX-109) for the treatment of unresectable or metastatic conventional chondrosarcoma and due to the expansion of our INBRX-106 Phase 1/2 trial and initiation of the Phase 2/3 trial for HNSCC, including expenses for in-house clinical trial support, offset in part by decreased expenses incurred following the termination of our INBRX-105 program, which we announced during the first quarter of 2024 and the spin-off of our INBRX-101 program, which occurred during the second quarter of 2024;

Previous wording

•facility and equipment-related expense increased by $1.0 million, which was attributable to expenses related to capitalized software placed in service during the period;

Current wording

•facility and equipment-related expense increased by $0.8 million, which was attributable to expenses related to capitalized software placed in service during the current year; and

Previous wording

•professional services-related expenses related to legal services increased by $1.7 million, which was primarily attributable to intellectual property, other general corporate matters, and legal proceedings.

Current wording

•offset by professional services-related expenses related to legal and accounting services, which increased by $1.0 million, primarily attributable to intellectual property, other general corporate matters, and legal proceedings.

Previous wording

Interest expense. Interest expense decreased by $2.5 million from $7.9 million during the three months ended June 30, 2023 to $5.4 million during the three months ended June 30, 2024, all of which relates to interest incurred and the amortization of debt discounts related to the 2020 Loan Agreement with Oxford and subsequent amendments between November 2020 and October 2022, or collectively, the Amended 2020 Loan Agreement. The decrease in interest expense is the result of the extinguishment of the Amended 2020 Loan Agreement in connection with the Merger. We did not incur any interest following the close of the Merger on May 30, 2024, the date upon which the Acquirer assumed our outstanding debt.

Current wording

Interest expense. Interest expense was $8.1 million during the three months ended September 30, 2023, all of which related to interest incurred and the amortization of debt discounts related to the 2020 Loan Agreement with Oxford and subsequent amendments between November 2020 and October 2022, or collectively, the Amended 2020 Loan Agreement. We did not incur any interest during the three months ended September 30, 2024 following the closing of the Merger on May 30, 2024, the date upon which the Acquirer assumed our outstanding debt.

Previous wording

Interest income. During the three months ended June 30, 2024, we earned $2.7 million of interest income related to interest earned on our sweep and money market account balances. During the three months ended June 30, 2023, we earned $2.4 million of interest income, which consisted of $0.1 million of interest income related to interest earned on our sweep and money market account balances and $2.3 million of interest earned on our investments in U.S. Treasury Bills.

Current wording

Interest income. During the three months ended September 30, 2024, we earned $2.9 million of interest income related to interest earned on our sweep and money market account balances. During the three months ended September 30, 2023, we earned $2.3 million of interest income, which consisted of $1.7 million of interest income related to interest earned on our sweep and money market account balances and $0.6 million of interest earned on our investments in U.S. Treasury Bills.

Previous wording

License fee revenue during the six months ended June 30, 2024 was $0.1 million and consisted of revenue related to our Regeneron Agreement, which we recognized following granting a six-month extension of the option term. License fee revenue during the six months ended June 30, 2023 was $47,000 and consisted of revenue related to a former option agreement which was completed during 2023.

Current wording

License fee revenue during the nine months ended September 30, 2024 was $0.1 million and consisted of revenue related to our Regeneron Agreement, which we recognized following the grant of a six-month extension of the option term. License fee revenue during the nine months ended September 30, 2023 was $0.2 million and consisted of revenue related to a former option agreement which was completed during 2023.

Previous wording

Research and development expenses increased by $60.0 million from $71.5 million during the six months ended June 30, 2023 to $131.5 million during the six months ended June 30, 2024. The overall increase was primarily due to the following factors:

Current wording

Research and development expenses increased by $60.8 million from $109.5 million during the nine months ended September 30, 2023 to $170.4 million during the nine months ended September 30, 2024. The overall increase was primarily due to the following factors:

Previous wording

•clinical trial expense increased by $6.1 million, primarily due to the progression of our ongoing registration-enabling Phase 2 trial for ozekibart (INBRX-109) for the treatment of unresectable or metastatic conventional chondrosarcoma and our INBRX-106 Phase 1/2 trial, as well as costs incurred for our registration-enabling Phase 2 trial for INBRX-101 for the treatment of emphysema due to AATD, prior to our spin-off of the INBRX-101 program during the period. These expenses were offset in part by reduced clinical expenses following the termination of our INBRX-105 program;

Current wording

•clinical trial expense increased by $8.9 million, primarily due to the expansion of our ongoing registration-enabling Phase 2 trial for ozekibart (INBRX-109) for the treatment of unresectable or metastatic conventional chondrosarcoma and due to the expansion of our INBRX-106 Phase 1/2 trial and initiation of the Phase 2/3 trial for HNSCC, including expenses for in-house clinical trial support, as well as costs incurred for our registration-enabling Phase 2 trial for INBRX-101 for the treatment of emphysema due to AATD, prior to our spin-off of the INBRX-101 program during the period. These expenses were offset in part by reduced clinical expenses following the termination of our INBRX-105 program;

Previous wording

•personnel-related expense increased by $27.1 million, which was primarily related to $25.9 million in stock option expense recognized upon the acceleration of outstanding options in connection with the close of the Merger;

Current wording

•personnel-related expense increased by $26.6 million, which was primarily related to $25.9 million in stock option expense recognized upon the acceleration of outstanding options in connection with the closing of the Merger;

Previous wording

•facility and equipment-related expense increased by $1.1 million, which was attributable to expenses related to capitalized software placed in service during the period; and

Current wording

•facility and equipment-related expense increased by $1.9 million, which was attributable to expenses related to capitalized software placed in service during the period; and

Previous wording

•other research and development expense increased by $2.6 million, which was primarily attributable to an increase in preclinical studies and the purchase of lab supplies.

Current wording

•other research and development expense increased by $2.4 million, which was primarily attributable to an increase in preclinical studies and clinical consulting services.

Previous wording

G&A expenses increased by $89.7 million from $13.7 million during the six months ended June 30, 2023 to $103.3 million during the six months ended June 30, 2024. The overall increase during the six months ended June 30, 2024, was primarily due to the following factors:

Current wording

G&A expenses increased by $89.7 million from $21.5 million during the nine months ended September 30, 2023 to $111.2 million during the nine months ended September 30, 2024. The overall increase during the nine months ended September 30, 2024, was primarily due to the following factors:

Previous wording

•expenses related to the Merger of $68.1 million, consisting of legal, advisory, consulting services performed in connection to the transaction and SEC filing fees in connection with filings related to the transaction;

Current wording

•expenses related to the Merger of $68.1 million, consisting of legal, advisory, and consulting services performed in connection to the transaction, and SEC filing fees in connection with filings related to the transaction;

Previous wording

•personnel-related expenses increased by $16.1 million, which was primarily related to $15.2 million in stock option expense recognized upon the acceleration of outstanding options in connection with the close of the Merger;

Current wording

•personnel-related expenses increased by $16.4 million, which was primarily related to $15.2 million in stock option expense recognized upon the acceleration of outstanding options in connection with the close of the Merger;

Previous wording

•professional services-related expenses related to legal services increased by $1.1 million, which was primarily attributable to intellectual property, other general corporate matters, and legal proceedings.

Current wording

•professional services-related expenses related to legal services increased by $2.9 million, which was primarily attributable to intellectual property, other general corporate matters, and legal proceedings; and

Previous wording

•pre-commercialization expenses increased by $1.6 million, primarily related to increases in consulting services to support our commercial operations business intelligence strategies and our market research expenses related to ozekibart (INBRX-109) and INBRX-101 prior to the Merger; and

Current wording

•pre-commercialization expenses increased by $2.2 million, primarily related to increases in consulting services and scientific publications to support our commercial operations business intelligence strategies related to ozekibart (INBRX-109) and prior to the Merger, related to INBRX-101, in addition to a focus on patient advocacy and recruitment efforts, offset in part by a decrease in market research efforts following the disposition of INBRX-101.

Previous wording

Interest expense. Interest expense decreased by $2.0 million from $15.5 million during the six months ended June 30, 2023 to $13.5 million during the six months ended June 30, 2024, all of which relates to interest incurred and the amortization of debt discounts related to the Amended 2020 Loan Agreement. The decrease in interest expense is the result of the extinguishment of the Amended 2020 Loan Agreement in connection with the Merger. We did not incur any interest following the close of the Merger on May 30, 2024, the date upon which the Acquirer assumed our outstanding debt.

Current wording

Interest expense. Interest expense decreased by $10.1 million from $23.6 million during the nine months ended September 30, 2023 to $13.5 million during the nine months ended September 30, 2024, all of which relates to interest incurred and the amortization of debt discounts related to the Amended 2020 Loan Agreement. The decrease in interest expense is the result of the extinguishment of the Amended 2020 Loan Agreement in connection with the Merger. We did not incur any interest following the close of the Merger on May 30, 2024, the date upon which the Acquirer assumed our outstanding debt.

Previous wording

Interest income. During the six months ended June 30, 2024, we earned $6.0 million of interest income related to interest earned on our sweep and money market account balances. During the six months ended June 30, 2023, we earned $4.9 million of interest income, which consisted of $1.1 million of interest income related to interest earned on our sweep and money market account balances and $3.8 million of interest earned on our investments in U.S. Treasury Bills. The increase in interest income during the six months ended June 30, 2024 is the result of higher cash and cash equivalent balances, coupled with rising interest rates, generating higher returns.

Current wording

Interest income. During the nine months ended September 30, 2024, we earned $8.9 million of interest income related to interest earned on our sweep and money market account balances. During the nine months ended September 30, 2023, we earned $7.2 million of interest income, which consisted of $2.8 million of interest income related to interest earned on our sweep and money market account balances and $4.4 million of interest earned on our investments in U.S. Treasury Bills. The increase in interest income during the nine months ended September 30, 2024 is the result of higher cash and cash equivalent balances, coupled with rising interest rates, generating higher returns.

Previous wording

Gain related to transaction with Acquirer. During the three months ended June 30, 2024, we earned $2.0 billion of other income, consisting of gains recorded in connection with the completion of the Merger. We recorded a gain of $1.7 billion related to Merger consideration for our outstanding common stock, warrants, and stock options, in addition to $211.3 million related to the extinguishment of our Amended 2020 Loan assumed by the Acquirer. In addition to the Acquirer assuming our outstanding debt, the Acquirer assumed outstanding assets and liabilities related to INBRX-101 upon the transaction, resulting in a gain of $14.5 million. The Acquirer also reimbursed us for or paid on our behalf $68.0 million of transaction costs related to the Merger, resulting in a gain. We do not expect future income or gains in connection with the Merger in future periods.

Current wording

Gain related to transaction with Acquirer. During the nine months ended September 30, 2024, we earned $2.0 billion of other income, consisting of gains recorded in connection with the completion of the Merger. We recorded a gain of $1.7 billion related to Merger consideration for our outstanding common stock, warrants, and stock options, in addition to $211.3 million related to the extinguishment of our Amended 2020 Loan assumed by the Acquirer. In addition to the Acquirer assuming our outstanding debt, the Acquirer assumed outstanding assets and liabilities related to INBRX-101 upon the transaction, resulting in a gain of $14.5 million. The Acquirer also reimbursed us for or paid on our behalf $68.0 million of transaction costs related to the Merger, resulting in a gain. We do not expect future income or gains in connection with the Merger in future periods.

Previous wording

Since our inception, we have devoted substantially all of our efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of our therapeutic candidates, pre-commercialization activities, organizing and staffing the Company, establishing our intellectual property portfolio, and raising capital to support and expand these activities. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. Our net income or losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities, as well as the timing of other corporate transactions. During the six months ended June 30, 2024, we had net income of $1.8 billion following the close of the Merger and during the six months ended June 30, 2023, our net loss was $96.0 million. As of June 30, 2024, we had an accumulated deficit of $14.4 million and cash and cash equivalents of $226.9 million.

Current wording

Since our inception, we have devoted substantially all of our efforts to therapeutic drug discovery and development, conducting preclinical studies and clinical trials, enabling manufacturing activities in support of our therapeutic candidates, pre-commercialization activities, organizing and staffing the Company, establishing our intellectual property portfolio, and raising capital to support and expand these activities. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. Our net income or losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities, as well as the timing of other corporate transactions. During the nine months ended September 30, 2024, we had net income of $1.7 billion following the closing of the Merger, and during the nine months ended September 30, 2023, our net loss was $147.8 million. As of September 30, 2024, we had an accumulated deficit of $58.3 million and cash and cash equivalents of $196.3 million.

Previous wording

Based upon our current operating plans, we believe that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the date these unaudited condensed consolidated financial statements are issued. Our forecast of the period through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.

Current wording

Based upon our current operating plans, we believe that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the date of filing of this Form 10-Q. Our forecast of the period through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.

Previous wording

The process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain. We expect to continue to incur net losses for the foreseeable future until, if ever, we have an approved product and can successfully commercialize it. We expect our research and development expenses to increase as we continue our development of, and seek marketing approvals for, our therapeutic candidates (especially as we move more candidates into later stages of clinical development), and begin to commercialize any approved products, if ever. At this time, we are preparing to proceed with the commercialization of certain of our product candidates, if ever approved. As a result, we will incur significant pre-commercialization expenses in preparation for launch, the outcome of which is uncertain. Additionally, if approved, we will incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. We also expect additional general and administrative expenses as we hire additional personnel and incur increased accounting, audit, legal, regulatory and compliance, investor and public relations expense to support our continued expansion.

Current wording

The process of conducting preclinical studies and testing therapeutic candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain. We expect to continue to incur net losses for the foreseeable future until, if ever, we have an approved product and can successfully commercialize it. We expect our research and development expenses to increase as we continue our development of, and seek marketing approvals for, our therapeutic candidates (especially as we move more candidates into later stages of clinical development), and begin to commercialize any approved products, if ever. At this time, we are preparing to proceed with the commercialization of certain of our therapeutic candidates, if ever approved. As a result, we will incur significant pre-commercialization expenses in preparation for launch, the outcome of which is uncertain. Additionally, if approved, we will incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. We also expect additional general and administrative expenses as we hire additional personnel and incur increased accounting, audit, legal, regulatory and compliance, investor and public relations expense to support our continued expansion.

Previous wording

Until such time we, if ever, can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including strategic licensing and collaborations, strategic transactions, or other similar arrangements and transactions, and from time to time, we engage in discussions with potential acquirers regarding the disposition of one or more of our product candidates. However, there can be no assurance as to the availability or terms upon which such finances or capital might be available in the future. If we are unable to secure adequate additional funding, we will need to reevaluate our operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of our development programs, or relinquish rights to our intellectual property on less favorable terms than we would otherwise choose. These actions could materially impact our business, results of operations, financial condition, and prospects.

Current wording

Until such time we, if ever, can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including strategic licensing and collaborations, strategic transactions, or other similar arrangements and transactions, and from time to time, we engage in discussions with potential acquirers regarding the disposition of one or more of our therapeutic candidates. If the Company does raise additional capital through public or private equity or convertible debt offerings, the ownership interests of its existing stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect its stockholders’ rights. If the Company raises capital through additional debt financings, it may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt or making certain capital expenditures. To the extent that the Company raises additional capital through strategic licensing, collaboration or other similar agreements, it may have to relinquish valuable rights to its therapeutic candidates, future revenue streams or research programs at an earlier stage of development or on less favorable terms than it would otherwise choose, or to grant licenses on terms that may not be favorable to the Company. However, there can be no assurance as to the availability or terms upon which such finances or capital might be available in the future. If we are unable to secure adequate additional funding, we will need to reevaluate our operating plan and may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, delay, scale back or eliminate some or all of our development programs, or relinquish rights to our intellectual property on less favorable terms than we would otherwise choose. These actions could materially impact our business, results of operations, financial condition, and prospects.

Previous wording

•our ability to successfully commercialize any therapeutic candidates that receive marketing approval;

Current wording

•our ability to successfully commercialize, including the costs and timing of manufacturing, any therapeutic candidates that receive marketing approval;

Previous wording

•our ability to repay, refinance or restructure our indebtedness when payment is due, including in the event such indebtedness is accelerated;

Current wording

•our ability to repay, refinance or restructure when payment is due any indebtedness we might incur, including in the event such indebtedness is accelerated;

Previous wording

•the continuing or future effects of a potential economic downturn, geopolitical events, and widespread health events on capital and financial markets.

Current wording

•the continuing or future effects of a potential economic downturn, inflation, interest rates, geopolitical events, and widespread health events on capital and financial markets, the supply chain and our expenses.