þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 26-1622110 | |||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||
704 Quince Orchard Road, Gaithersburg, MD | 20878 | |||||||||||
(Address of principal executive offices) | (Zip Code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||
Common Stock, $0.0001 par value per share | RNAC | The Nasdaq Stock Market LLC | ||||||||
Securities registered pursuant to Section 12(g) of the Act: | ||||||||||
Title of each class | ||||||||||
Contingent Value Rights |
Large accelerated filer | ☐ | Accelerated filer | þ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | þ | ||||||||||||||||||
Emerging growth company | ☐ |
TABLE OF CONTENTS
TABLE OF CONTENTS | ||||||||||||||
Item 1. | ||||||||||||||
Item 2. | ||||||||||||||
Item 3. | ||||||||||||||
Item 4. | ||||||||||||||
Item 1. | ||||||||||||||
Item 1A. | ||||||||||||||
Item 2. | ||||||||||||||
Item 3. | ||||||||||||||
Item 4. | ||||||||||||||
Item 5. | ||||||||||||||
Item 6. | ||||||||||||||
•any future payouts under the contingent value right, or CVR, issued to our holders of record as of the close of business on December 4, 2023;
•our market size and our potential growth opportunities;
•uncertainties with respect to our ability to access future capital needs and our need to raise additional funds;
•our ability to maximize the value of our pipeline of product candidates;
•our unproven approach to therapeutic intervention;
•our ability to enroll patients in clinical trials, timely and successfully complete those trials and receive necessary regulatory approvals;
•our ability to continue to grow our manufacturing capabilities and resources;
•our ability to maintain our existing or future collaborations or licenses and to seek new collaborations, licenses or partnerships;
•the • |
our ability to protect and enforce our intellectual property rights;
•federal, state, and foreign regulatory requirements, including U.S. Food and Drug Administration, or FDA, regulation of our product candidates;
•our ability to obtain and retain key executives and attract and retain qualified personnel; and
•developments relating to our competitors and our industry, including the impact of government regulation.
3
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 103,418 | $ | 76,911 | |||||||
Accounts receivable | 2,006 | 5,870 | |||||||||
Unbilled receivables | 2,370 | 2,981 | |||||||||
Prepaid expenses and other current assets | 3,315 | 4,967 | |||||||||
Total current assets | 111,109 | 90,729 | |||||||||
Non-current assets: | |||||||||||
Property and equipment, net | 2,402 | 2,113 | |||||||||
Right-of-use asset, net | 9,556 | 10,068 | |||||||||
In-process research and development assets | 150,600 | 150,600 | |||||||||
Goodwill | 48,163 | 48,163 | |||||||||
Long-term restricted cash | 1,377 | 1,377 | |||||||||
Investments | 2,000 | 2,000 | |||||||||
Total assets | $ | 325,207 | $ | 305,050 | |||||||
Liabilities, convertible preferred stock, and stockholders’ deficit | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 2,517 | $ | 3,150 | |||||||
Accrued expenses and other current liabilities | 9,516 | 15,572 | |||||||||
Lease liability | 2,229 | 2,166 | |||||||||
Deferred revenue | 412 | 2,311 | |||||||||
Warrant liabilities | 597 | 720 | |||||||||
Contingent value right liability | 21,383 | 15,983 | |||||||||
Forward contract liabilities | — | 28,307 | |||||||||
Total current liabilities | 36,654 | 68,209 | |||||||||
Non-current liabilities: | |||||||||||
Lease liability, net of current portion | 8,228 | 8,789 | |||||||||
Deferred revenue, net of current portion | — | 3,538 | |||||||||
Warrant liabilities, net of current portion | 4,755 | 5,674 | |||||||||
Contingent value right liability, net of current portion | 376,517 | 342,617 | |||||||||
Deferred tax liabilities, net | 15,853 | 15,853 | |||||||||
Total liabilities | 442,007 | 444,680 | |||||||||
Commitments and contingencies (Note 18) | |||||||||||
Series A Preferred Stock, $0.0001 par value; no and 548,375 shares authorized as of March 31, 2024 and December 31, 2023, respectively; no and 435,120.513 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | — | 296,851 | |||||||||
Options for Series A Preferred Stock | — | 3,703 | |||||||||
Stockholders’ deficit: | |||||||||||
Series A Preferred Stock, $0.0001 par value; 548,375 and no shares authorized as of March 31, 2024 and December 31, 2023, respectively; 534,260.839 and no shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | — | — | |||||||||
Preferred stock, $0.0001 par value; 9,451,625 shares authorized as of March 31, 2024 and December 31, 2023, respectively; no shares issued and outstanding as of March 31, 2024 and December 31, 2023 | — | — | |||||||||
Common stock, $0.0001 par value; 350,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 5,515,836 and 5,397,597 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 1 | 1 | |||||||||
Additional paid-in capital | 559,275 | 179,062 | |||||||||
Accumulated deficit | (671,471) | (614,647) | |||||||||
Accumulated other comprehensive loss | (4,605) | (4,600) | |||||||||
Total stockholders’ deficit | (116,800) | (440,184) | |||||||||
Total liabilities, convertible preferred stock, and stockholders’ deficit | $ | 325,207 | $ | 305,050 |
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 112,027 | $ | 106,438 | ||||
Marketable securities | — | 28,164 | ||||||
Accounts receivable | 5,385 | 6,596 | ||||||
Unbilled receivables | 1,055 | 3,162 | ||||||
Prepaid expenses and other current assets | 4,258 | 3,778 | ||||||
Total current assets | 122,725 | 148,138 | ||||||
Non-current assets: | ||||||||
Property and equipment, net | 2,593 | 2,794 | ||||||
Right-of-use | 10,775 | 11,617 | ||||||
Long-term restricted cash | 1,377 | 1,311 | ||||||
Investments | 2,000 | 2,000 | ||||||
Other assets | 36 | 26 | ||||||
Total assets | $ | 139,506 | $ | 165,886 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 267 | $ | 316 | ||||
Accrued expenses | 12,902 | 14,084 | ||||||
Loan payable | 10,235 | 8,476 | ||||||
Lease liability | 1,729 | 1,608 | ||||||
Deferred revenue | 4,234 | 593 | ||||||
Total current liabilities | 29,367 | 25,077 | ||||||
Non-current liabilities: | ||||||||
Loan payable, net of current portion | 13,787 | 17,786 | ||||||
Lease liability | 9,163 | 10,055 | ||||||
Deferred revenue | 4,863 | — | ||||||
Warrant liabilities | 16,878 | 19,140 | ||||||
Total liabilities | 74,058 | 72,058 | ||||||
Commitments and contingencies (Note 17) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022 | — | — | ||||||
Common stock, $0.0001 par value; 350,000,000 shares authorized; 153,427,571 and 153,042,435 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 15 | 15 | ||||||
Additional paid-in capital | 498,016 | 493,308 | ||||||
Accumulated deficit | (427,987 | ) | (394,937 | ) | ||||
Accumulated other comprehensive loss | (4,596 | ) | (4,558 | ) | ||||
Total stockholders’ equity | 65,448 | 93,828 | ||||||
Total liabilities and stockholders’ equity | $ | 139,506 | $ | 165,886 | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||
Collaboration and license revenue | $ | 5,249 | $ | 39,273 | $ | 11,187 | $ | 73,272 | ||||||||||
Collaboration and license revenue | ||||||||||||||||||
Collaboration and license revenue | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||
Research and development | 17,782 | 19,182 | 36,406 | 36,871 | ||||||||||||||
Research and development | ||||||||||||||||||
Research and development | ||||||||||||||||||
General and administrative | 6,105 | 6,231 | 11,800 | 11,768 | ||||||||||||||
General and administrative | ||||||||||||||||||
General and administrative | ||||||||||||||||||
Total operating expenses | ||||||||||||||||||
Total operating expenses | ||||||||||||||||||
Total operating expenses | ||||||||||||||||||
Operating loss | ||||||||||||||||||
Operating loss | ||||||||||||||||||
Operating loss | ||||||||||||||||||
Investment income | ||||||||||||||||||
Investment income | ||||||||||||||||||
Investment income | ||||||||||||||||||
Total operating expenses | 23,887 | 25,413 | 48,206 | 48,639 | ||||||||||||||
Foreign currency transaction, net | ||||||||||||||||||
Operating (loss) income | (18,638 | ) | 13,860 | (37,019 | ) | 24,633 | ||||||||||||
Investment income | 1,394 | 207 | 2,725 | 222 | ||||||||||||||
Foreign currency transaction, net | ||||||||||||||||||
Foreign currency transaction, net | 23 | (104 | ) | 42 | (76 | ) | ||||||||||||
Interest expense | (752 | ) | (715 | ) | (1,560 | ) | (1,422 | ) | ||||||||||
Interest expense | ||||||||||||||||||
Interest expense | ||||||||||||||||||
Change in fair value of warrant liabilities | 6,341 | (4,647 | ) | 2,262 | 13,868 | |||||||||||||
Change in fair value of warrant liabilities | ||||||||||||||||||
Change in fair value of warrant liabilities | ||||||||||||||||||
Change in fair value of contingent value right liability | ||||||||||||||||||
Change in fair value of contingent value right liability | ||||||||||||||||||
Change in fair value of contingent value right liability | ||||||||||||||||||
Change in fair value of forward contract liabilities | ||||||||||||||||||
Change in fair value of forward contract liabilities | ||||||||||||||||||
Change in fair value of forward contract liabilities | ||||||||||||||||||
Other income, net | ||||||||||||||||||
Other income, net | ||||||||||||||||||
Other income, net | 245 | — | 500 | 154 | ||||||||||||||
Net (loss) income | $ | (11,387 | ) | $ | 8,601 | $ | (33,050 | ) | $ | 37,379 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||||
Net loss | ||||||||||||||||||
Net loss | ||||||||||||||||||
Net loss | ||||||||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||
Other comprehensive (loss) income: | ||||||||||||||||||
Foreign currency translation adjustment | (27 | ) | 118 | (49 | ) | 86 | ||||||||||||
Unrealized gain on marketable securities | — | — | 11 | — | ||||||||||||||
Foreign currency translation adjustment | ||||||||||||||||||
Foreign currency translation adjustment | ||||||||||||||||||
Unrealized gain (loss) on marketable securities | ||||||||||||||||||
Unrealized gain (loss) on marketable securities | ||||||||||||||||||
Unrealized gain (loss) on marketable securities | ||||||||||||||||||
Total comprehensive loss | ||||||||||||||||||
Total comprehensive loss | ||||||||||||||||||
Total comprehensive loss | ||||||||||||||||||
Total comprehensive income (loss) | $ | (11,414 | ) | $ | 8,719 | $ | (33,088 | ) | $ | 37,465 | ||||||||
Net (loss) income per share: | ||||||||||||||||||
Basic | $ | (0.07 | ) | $ | 0.06 | $ | (0.22 | ) | $ | 0.27 | ||||||||
Diluted | $ | (0.07 | ) | $ | 0.06 | $ | (0.22 | ) | $ | 0.17 | ||||||||
Net loss per share: | ||||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||
Basic | 153,442,413 | 148,505,729 | 153,396,380 | 136,436,316 | ||||||||||||||
Diluted | 153,442,413 | 148,505,729 | 153,396,380 | 136,966,312 | ||||||||||||||
Net loss per share: | ||||||||||||||||||
Net loss per share: | ||||||||||||||||||
Basic and Diluted | ||||||||||||||||||
Basic and Diluted | ||||||||||||||||||
Basic and Diluted | ||||||||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||
Basic and Diluted | ||||||||||||||||||
Basic and Diluted | ||||||||||||||||||
Basic and Diluted |
Accumulated | ||||||||||||||||||||||||
Additional | other | |||||||||||||||||||||||
Common stock | paid-in | Accumulated | comprehensive | Stockholders’ | ||||||||||||||||||||
Shares | Amount | capital | deficit | loss | equity | |||||||||||||||||||
Balance at December 31, 2022 | 153,042,435 | $ | 15 | $ | 493,308 | $ | (394,937 | ) | $ | (4,558 | ) | $ | 93,828 | |||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 108,068 | — | 149 | — | — | 149 | ||||||||||||||||||
Issuance of vested restricted stock units | 276,480 | — | — | — | — | — | ||||||||||||||||||
Stock-based compensation expense | — | �� | — | 2,276 | — | — | 2,276 | |||||||||||||||||
Currency translation adjustment | — | — | — | — | (22 | ) | (22 | ) | ||||||||||||||||
Unrealized gain on marketable securities | — | — | — | — | 11 | 11 | ||||||||||||||||||
Net loss | — | — | — | (21,663 | ) | — | (21,663 | ) | ||||||||||||||||
Balance at March 31, 2023 | 153,426,983 | $ | 15 | $ | 495,733 | $ | (416,600 | ) | $ | (4,569 | ) | $ | 74,579 | |||||||||||
Issuance of vested restricted stock units | 588 | — | — | — | — | — | ||||||||||||||||||
Stock-based compensation expense | — | — | 2,283 | — | — | 2,283 | ||||||||||||||||||
Currency translation adjustment | — | — | — | — | (27 | ) | (27 | ) | ||||||||||||||||
Net loss | — | — | — | (11,387 | ) | — | (11,387 | ) | ||||||||||||||||
Balance at June 30, 2023 | 153,427,571 | $ | 15 | $ | 498,016 | $ | (427,987 | ) | $ | (4,596 | ) | $ | 65,448 | |||||||||||
Options for Series A | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Series A | Preferred | Series A | Additional | other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Stock | Preferred Stock | Common stock | paid-in | Accumulated | comprehensive | Stockholders’ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Amount | Shares | Amount | Shares | Amount | capital | deficit | loss | equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | 435,120.513 | $ | 296,851 | $ | 3,703 | — | $ | — | 5,397,597 | $ | 1 | $ | 179,062 | $ | (614,647) | $ | (4,600) | $ | (440,184) | ||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series A Preferred Stock in connection with private placement and settlement of related forward contract | 99,140.326 | 75,197 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfer of Series A Preferred Stock and options for series A Preferred Stock to permanent equity | (534,260.839) | (372,048) | (3,703) | 534,260.839 | — | — | — | 375,751 | — | — | 375,751 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of options | — | — | — | — | — | 52,558 | — | 154 | — | — | 154 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants | — | — | — | — | — | 65,681 | — | 2,877 | — | — | 2,877 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | 1,431 | — | — | 1,431 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | — | — | — | — | — | (5) | (5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | (56,824) | — | (56,824) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | — | $ | — | $ | — | 534,260.839 | $ | — | 5,515,836 | $ | 1 | $ | 559,275 | $ | (671,471) | $ | (4,605) | $ | (116,800) | ||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||||||||||||
Additional | other | |||||||||||||||||||||||||||||||||||||
Common stock | paid-in | Accumulated | comprehensive | Stockholders’ | ||||||||||||||||||||||||||||||||||
Shares | Amount | capital | deficit | loss | equity | |||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 5,101,459 | $ | 1 | $ | 493,322 | $ | (394,937) | $ | (4,558) | $ | 93,828 | |||||||||||||||||||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 3,584 | — | 149 | — | — | 149 | ||||||||||||||||||||||||||||||||
Issuance of vested restricted stock units | 9,226 | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | 2,276 | — | — | 2,276 | ||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | (22) | (22) | ||||||||||||||||||||||||||||||||
Unrealized gain on marketable securities | — | — | — | — | 11 | 11 | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | (21,663) | — | (21,663) | ||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | 5,114,269 | $ | 1 | $ | 495,747 | $ | (416,600) | $ | (4,569) | $ | 74,579 | |||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||
Additional | other | |||||||||||||||||||||||
Common stock | paid-in | Accumulated | comprehensive | Stockholders’ | ||||||||||||||||||||
Shares | Amount | capital | deficit | loss | equity | |||||||||||||||||||
Balance at December 31, 2021 | 123,622,965 | $ | 12 | $ | 457,391 | $ | (430,316 | ) | $ | (4,566 | ) | $ | 22,521 | |||||||||||
Issuance of common stock under Employee Stock Purchase Plan | 81,057 | — | 127 | — | — | 127 | ||||||||||||||||||
Issuance of common stock upon exercise of options | 11,262 | — | 21 | — | — | 21 | ||||||||||||||||||
Issuance of vested restricted stock units | 89,142 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock through at-the-market | 576,418 | — | 1,675 | — | — | 1,675 | ||||||||||||||||||
Other financing fees | — | — | (79 | ) | — | — | (79 | ) | ||||||||||||||||
Stock-based compensation expense | — | — | 2,753 | — | — | 2,753 | ||||||||||||||||||
Currency translation adjustment | — | — | — | — | (32 | ) | (32 | ) | ||||||||||||||||
Net income | — | — | — | 28,778 | — | 28,778 | ||||||||||||||||||
Balance at March 31, 2022 | 124,380,844 | $ | 12 | $ | 461,888 | $ | (401,538 | ) | $ | (4,598 | ) | $ | 55,764 | |||||||||||
Issuance of vested restricted stock units | 10,938 | — | — | — | — | — | ||||||||||||||||||
Issuance of common stock and common warrants | 27,428,572 | 3 | 21,477 | — | — | 21,480 | ||||||||||||||||||
Issuance of common stock, license agreement | 892,857 | — | 1,000 | — | — | 1,000 | ||||||||||||||||||
Other financing fees | — | — | 79 | — | — | 79 | ||||||||||||||||||
Stock-based compensation expense | — | — | 2,564 | — | — | 2,564 | ||||||||||||||||||
Currency translation adjustment | — | — | — | — | 118 | 118 | ||||||||||||||||||
Net income | — | — | — | 8,601 | — | 8,601 | ||||||||||||||||||
Balance at June 30, 2022 | 152,713,211 | $ | 15 | $ | 487,008 | $ | (392,937 | ) | $ | (4,480 | ) | $ | 89,606 | |||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||||||||
Net loss | $ | (56,824) | $ | (21,663) | ||||||||||||||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||||||||||||
Depreciation and amortization | 183 | 206 | ||||||||||||||||||||||||
Amortization of premiums and discounts on marketable securities | — | (79) | ||||||||||||||||||||||||
Non-cash lease expense | 512 | 416 | ||||||||||||||||||||||||
Loss on disposal of property and equipment | 2 | — | ||||||||||||||||||||||||
Stock-based compensation expense | 1,431 | 2,276 | ||||||||||||||||||||||||
Non-cash interest expense | — | 398 | ||||||||||||||||||||||||
Warrant liabilities revaluation | (1,042) | 4,079 | ||||||||||||||||||||||||
Contingent value right liability revaluation | 39,300 | — | ||||||||||||||||||||||||
Forward contract liabilities revaluation | 6,890 | — | ||||||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||
Accounts receivable | 3,864 | (243) | ||||||||||||||||||||||||
Unbilled receivable | 611 | 1,319 | ||||||||||||||||||||||||
Prepaid expenses, deposits and other assets | 1,652 | (20) | ||||||||||||||||||||||||
Accounts payable | (633) | 747 | ||||||||||||||||||||||||
Deferred revenue | (5,437) | 9,158 | ||||||||||||||||||||||||
Accrued expenses and other liabilities | (6,426) | (5,359) | ||||||||||||||||||||||||
Net cash used in operating activities | (15,917) | (8,765) | ||||||||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||
Proceeds from maturities of marketable securities | — | 28,254 | ||||||||||||||||||||||||
Purchases of property and equipment | (602) | (130) | ||||||||||||||||||||||||
Net cash (used in) provided by investing activities | (602) | 28,124 | ||||||||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||
Proceeds from exercise of common warrants | 2,877 | — | ||||||||||||||||||||||||
Proceeds from issuance of Series A Preferred Stock, gross in private placement | 40,000 | — | ||||||||||||||||||||||||
Proceeds from exercise of stock options | 154 | — | ||||||||||||||||||||||||
Proceeds from issuance of common stock under Employee Stock Purchase Plan | — | 149 | ||||||||||||||||||||||||
Net cash provided by financing activities | 43,031 | 149 | ||||||||||||||||||||||||
Effect of exchange rate changes on cash | (5) | (21) | ||||||||||||||||||||||||
Net change in cash, cash equivalents, and restricted cash | 26,507 | 19,487 | ||||||||||||||||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 78,288 | 108,038 | ||||||||||||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 104,795 | $ | 127,525 | ||||||||||||||||||||||
Supplemental cash flow information | ||||||||||||||||||||||||||
Cash paid for interest | $ | — | $ | 625 | ||||||||||||||||||||||
Noncash investing and financing activities | ||||||||||||||||||||||||||
Purchase of property and equipment not yet paid | $ | — | $ | 48 | ||||||||||||||||||||||
Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities | ||||||||
Net (loss) income | $ | (33,050 | ) | $ | 37,379 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
Depreciation and amortization | 382 | 696 | ||||||
Amortization of premiums and discounts on marketable securities | (79 | ) | — | |||||
Non-cash lease expense | 842 | 591 | ||||||
Gain on disposal of property and equipment | — | (147 | ) | |||||
Stock-based compensation expense | 6,059 | 6,317 | ||||||
Non-cash interest expense | 533 | 579 | ||||||
Warrant liabilities revaluation | (2,262 | ) | (13,868 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 1,211 | (14,080 | ) | |||||
Unbilled receivable | 2,107 | — | ||||||
Prepaid expenses, deposits and other assets | 815 | (374 | ) | |||||
Accounts payable | (49 | ) | 300 | |||||
Income taxes payable | — | (280 | ) | |||||
Deferred revenue | 8,504 | (42,213 | ) | |||||
Accrued expenses and other liabilities | (3,673 | ) | 965 | |||||
Net cash used in operating activities | (18,660 | ) | (24,135 | ) | ||||
Cash flows from investing activities | ||||||||
Proceeds from maturities of marketable securities | 28,254 | 10,000 | ||||||
Purchases of property and equipment | (142 | ) | (554 | ) | ||||
Net cash provided by investing activities | 28,112 | 9,446 | ||||||
Cash flows from financing activities | ||||||||
Repayments of principal on outstanding debt | (2,586 | ) | — | |||||
Debt amendment fee included in debt discount | — | (110 | ) | |||||
Net proceeds from issuance of common stock- at-the-market | — | 1,675 | ||||||
Net proceeds from issuance of common stock and common warrants | — | 36,890 | ||||||
Proceeds from exercise of stock options | — | 21 | ||||||
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 149 | 127 | ||||||
Net cash (used in) provided by financing activities | (2,437 | ) | 38,603 | |||||
Effect of exchange rate changes on cash | (49 | ) | 86 | |||||
Net change in cash, cash equivalents, and restricted cash | 6,966 | 24,000 | ||||||
Cash, cash equivalents, and restricted cash at beginning of period | 108,038 | 115,436 | ||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 115,004 | $ | 139,436 | ||||
Supplemental cash flow information | ||||||||
Cash paid for interest | $ | 1,242 | $ | 1,014 | ||||
Noncash investing and financing activities | ||||||||
Issuance of common stock, license agreement in stock-based compensation expense | $ | — | $ | 1,000 | ||||
Stock-based compensation expense in accrued liabilities | $ | 1,500 | $ | — | ||||
Purchase of property and equipment not yet paid | $ | 48 | $ | 320 | ||||
Equity offering costs in accrued liabilities | $ | — | $ | 31 |
Forward contract to issue common stock | $ | 2,713 | |||
Forward contract to issue Series A Preferred Stock | 155,308 | ||||
Stock options allocated to consideration paid | 10,444 | ||||
Total consideration | $ | 168,465 |
Amortized cost | Unrealized losses | Fair value | ||||||||||
December 31, 2022 | ||||||||||||
U.S. government agency securities and treasuries | $ | 13,566 | $ | (9 | ) | $ | 13,557 | |||||
Corporate bonds | $ | 1,953 | $ | (2 | ) | $ | 1,951 | |||||
Commercial paper | 12,656 | — | 12,656 | |||||||||
Total | $ | 28,175 | $ | (11 | ) | $ | 28,164 | |||||
Assets acquired: | As of November 13, 2023 | ||||
Cash and cash equivalents | $ | 6,561 | |||
Prepaid expenses and other current assets | 309 | ||||
Property and equipment, net | 215 | ||||
Right-of-use asset, net | 915 | ||||
In-process research and development assets | 150,600 | ||||
Goodwill | 48,163 | ||||
$ | 206,763 | ||||
Liabilities assumed | |||||
Accrued expenses and other current liabilities | $ | 2,530 | |||
Lease liability | $ | 292 | |||
Lease liability, net of current portion | $ | 623 | |||
Deferred tax liability | $ | 34,853 | |||
$ | 38,298 | ||||
Net assets acquired | $ | 168,465 |
Acquisition Date Fair Value | ||||||||||||||||||||
Descartes-08 for MG | $ | 93,900 | ||||||||||||||||||
Descartes-08 for SLE | 56,700 | |||||||||||||||||||
Total in-process research and development assets | $ | 150,600 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Numerator: | ||||||||||||||||
Net (loss) income | $ | (11,387 | ) | $ | 8,601 | $ | (33,050 | ) | $ | 37,379 | ||||||
Less: Change in fair value of liability warrants | — | — | — | (13,868 | ) | |||||||||||
Adjusted net (loss) income | $ | (11,387 | ) | $ | 8,601 | $ | (33,050 | ) | $ | 23,511 | ||||||
Denominator: | ||||||||||||||||
Weighted-average common shares outstanding - basic | 153,442,413 | 148,505,729 | 153,396,380 | 136,436,316 | ||||||||||||
Dilutive effect of employee equity incentive plans and outstanding warrants | — | — | — | 529,996 | ||||||||||||
Weighted-average common shares used in per share calculations - diluted | 153,442,413 | 148,505,729 | 153,396,380 | 136,966,312 | ||||||||||||
Net (loss) income per share: | ||||||||||||||||
Basic | $ | (0.07 | ) | $ | 0.06 | $ | (0.22 | ) | $ | 0.27 | ||||||
Diluted | $ | (0.07 | ) | $ | 0.06 | $ | (0.22 | ) | $ | 0.17 | ||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||||||||
Net loss allocable to shares of common stock - basic and diluted | $ | (56,824) | $ | (21,663) | ||||||||||||||||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||||||||
Weighted-average common shares outstanding - basic and diluted | 5,414,020 | 5,111,518 | ||||||||||||||||||||||||||||||||||||
Net loss per share: | ||||||||||||||||||||||||||||||||||||||
Basic and Diluted | $ | (10.50) | $ | (4.24) | ||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||||||||||||||
Common stock options, restricted stock units and ESPP shares | 1,811,636 | 773,488 | ||||||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 975,132 | 1,040,942 | ||||||||||||||||||||||||||||||||||||
Series A Preferred Stock | 17,808,670 | — | ||||||||||||||||||||||||||||||||||||
Series A Preferred Stock options | 470,403 | — | ||||||||||||||||||||||||||||||||||||
Total | 21,065,841 | 1,814,430 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Options, RSUs and ESPP shares | 22,607,689 | 16,422,488 | 22,607,689 | 16,660,700 | ||||||||||||
Warrants to purchase common stock | 31,228,279 | 31,307,409 | 31,228,279 | 20,863,898 | ||||||||||||
Total | 53,835,968 | 47,729,897 | 53,835,968 | 37,524,598 | ||||||||||||
March 31, 2024 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Money market funds (included in cash equivalents) | $ | 38,672 | $ | 38,672 | $ | — | $ | — | |||||||||||||||
Total assets | $ | 38,672 | $ | 38,672 | $ | — | $ | — | |||||||||||||||
Liabilities: | |||||||||||||||||||||||
Warrant liabilities | $ | 5,352 | $ | — | $ | — | $ | 5,352 | |||||||||||||||
Contingent value right liability | $ | 397,900 | $ | — | $ | — | $ | 397,900 | |||||||||||||||
Total liabilities | $ | 403,252 | $ | — | $ | — | $ | 403,252 |
June 30, 2023 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Money market funds (included in cash equivalents) | $ | 73,384 | $ | 73,384 | $ | — | $ | — | ||||||||
Total assets | $ | 73,384 | $ | 73,384 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Warrant liabilities | $ | 16,878 | $ | — | $ | — | $ | 16,878 | ||||||||
Total liabilities | $ | 16,878 | $ | — | $ | — | $ | 16,878 | ||||||||
December 31, 2023 | December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Money market funds (included in cash equivalents) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Money market funds (included in cash equivalents) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Money market funds (included in cash equivalents) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Money market funds (included in cash equivalents) | $ | 53,552 | $ | 53,552 | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. government agency securities and treasuries | 13,557 | — | 13,557 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds | 1,951 | — | 1,951 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial paper | 12,656 | — | 12,656 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 81,716 | $ | 53,552 | $ | 28,164 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant liabilities | $ | 19,140 | $ | — | $ | — | $ | 19,140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent value right liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forward contract liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | $ | 19,140 | $ | — | $ | — | $ | 19,140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, | |||||||||||||||||||
2023 | 2022 | ||||||||||||||||||
March 31, | |||||||||||||||||||
March 31, | |||||||||||||||||||
March 31, | |||||||||||||||||||
2024 | |||||||||||||||||||
2024 | |||||||||||||||||||
2024 | |||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash and cash equivalents | $ | 112,027 | $ | 138,057 | |||||||||||||||
Short-term restricted cash | 1,600 | — | |||||||||||||||||
Short-term restricted cash | |||||||||||||||||||
Short-term restricted cash | |||||||||||||||||||
Long-term restricted cash | 1,377 | 1,379 | |||||||||||||||||
Long-term restricted cash | |||||||||||||||||||
Long-term restricted cash | |||||||||||||||||||
Total cash, cash equivalents, and restricted cash | $ | 115,004 | $ | 139,436 | |||||||||||||||
Total cash, cash equivalents, and restricted cash | |||||||||||||||||||
Total cash, cash equivalents, and restricted cash |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Risk-free interest rate | 5.38 | % | 4.79 | % | |||||||
Dividend yield | — | — | |||||||||
Expected life (in years) | 0.73 | 0.98 | |||||||||
Expected volatility | 96.03 | % | 83.67 | % |
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
Risk-free interest rate | 5.40 | % | 4.74 | % | ||||
Dividend yield | — | — | ||||||
Expected life (in years) | 1.48 | 1.98 | ||||||
Expected volatility | 82.80 | % | 79.92 | % |
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
Risk-free interest rate | 4.49 | % | 4.22 | % | ||||
Dividend yield | — | — | ||||||
Expected life (in years) | 3.78 | 4.28 | ||||||
Expected volatility | 91.59 | % | 98.05 | % |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Risk-free interest rate | 4.40 | % | 4.01 | % | |||||||
Dividend yield | — | — | |||||||||
Expected life (in years) | 3.03 | 3.28 | |||||||||
Expected volatility | 82.72 | % | 84.09 | % |
Warrant liabilities | |||||
Fair value as of December 31, 2023 | $ | 6,394 | |||
Change in fair value | (1,042) | ||||
Fair value as of March 31, 2024 | $ | 5,352 | |||
Warrant liabilities | ||||
Fair value as of December 31, 2022 | $ | 19,140 | ||
Change in fair value | (2,262 | ) | ||
Fair value as of June 30, 2023 | $ | 16,878 | ||
March 31, | |||||||||||
2024 | |||||||||||
Estimated cash flow dates | 2024-2038 | ||||||||||
Estimated probability of success | 95.0 | % | |||||||||
Expected volatility of future revenues | 25.0 | % | |||||||||
December 31, | |||||||||||
2023 | |||||||||||
Estimated cash flow dates | 2024 - 2038 | ||||||||||
Estimated probability of success | 95.0 | % | |||||||||
Risk-adjusted discount rate | 13.7 | % |
CVR liability | |||||
Fair value as of December 31, 2023 | $ | 358,600 | |||
Change in fair value | 39,300 | ||||
Fair value as of March 31, 2024 | $ | 397,900 |
Forward contract liabilities | |||||
Fair value as of December 31, 2023 | $ | 28,307 | |||
Settlements | (35,197) | ||||
Change in fair value | 6,890 | ||||
Fair value as of March 31, 2024 | $ | — |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Laboratory equipment | $ | 6,662 | $ | 6,280 | |||||||
Computer equipment and software | 620 | 702 | |||||||||
Leasehold improvements | 61 | 61 | |||||||||
Furniture and fixtures | 452 | 452 | |||||||||
Office equipment | 196 | 196 | |||||||||
Construction in process | 241 | 150 | |||||||||
Total property and equipment | 8,232 | 7,841 | |||||||||
Less: Accumulated depreciation | (5,830) | (5,728) | |||||||||
Property and equipment, net | $ | 2,402 | $ | 2,113 |
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
Laboratory equipment | $ | 6,263 | $ | 6,001 | ||||
Computer equipment and software | 702 | 697 | ||||||
Leasehold improvements | 61 | 57 | ||||||
Furniture and fixtures | 453 | 453 | ||||||
Office equipment | 196 | 192 | ||||||
Construction in process | 492 | 599 | ||||||
Total property and equipment | 8,167 | 7,999 | ||||||
Less: Accumulated depreciation | (5,574 | ) | (5,205 | ) | ||||
Property and equipment, net | $ | 2,593 | $ | 2,794 | ||||
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
Payroll and employee related expenses | $ | 1,701 | $ | 4,390 | |||||||
Accrued patent fees | 1,177 | 472 | |||||||||
Accrued external research and development costs | 2,614 | 4,896 | |||||||||
Accrued professional and consulting services | 3,055 | 4,331 | |||||||||
Other | 380 | 644 | |||||||||
Accrued expenses | $ | 8,927 | $ | 14,733 |
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
Payroll and employee related expenses | $ | 2,978 | $ | 4,242 | ||||
Collaboration and licensing | 2,523 | — | ||||||
Accrued patent fees | 471 | 696 | ||||||
Accrued external research and development costs | 5,094 | 7,274 | ||||||
Accrued professional and consulting services | 1,257 | 985 | ||||||
Accrued interest | 187 | 222 | ||||||
Other | 392 | 665 | ||||||
Accrued expenses | $ | 12,902 | $ | 14,084 | ||||
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Operating lease cost | $ | 775 | $ | 696 | |||||||||||||||||||
Variable lease cost | 397 | 142 | |||||||||||||||||||||
Short-term lease cost | 3 | 3 | |||||||||||||||||||||
Less: Sublease income | (510) | (255) | |||||||||||||||||||||
Total lease cost | $ | 665 | $ | 586 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Operating lease cost | $ | 696 | $ | 505 | $ | 1,392 | $ | 1,011 | ||||||||
Variable lease cost | 270 | 205 | 412 | 425 | ||||||||||||
Short-term lease cost | 2 | 2 | 5 | 5 | ||||||||||||
Less: Sublease income | (251 | ) | — | (506 | ) | — | ||||||||||
Total lease cost | $ | 717 | $ | 712 | $ | 1,303 | $ | 1,441 | ||||||||
June 30, | |||||||||
2023 | |||||||||
2023 (remainder) | $ | 1,349 | |||||||
March 31, | |||||||||
March 31, | |||||||||
March 31, | |||||||||
2024 | 2,740 | ||||||||
2024 | |||||||||
2024 | |||||||||
2024 (remainder) | |||||||||
2024 (remainder) | |||||||||
2024 (remainder) | |||||||||
2025 | |||||||||
2025 | |||||||||
2025 | 2,818 | ||||||||
2026 | 2,902 | ||||||||
2026 | |||||||||
2026 | |||||||||
2027 | 2,990 | ||||||||
2027 | |||||||||
2027 | |||||||||
2028 | |||||||||
2028 | |||||||||
2028 | |||||||||
Thereafter | 946 | ||||||||
Thereafter | |||||||||
Thereafter | |||||||||
Total future minimum lease payments | |||||||||
Total future minimum lease payments | |||||||||
Total future minimum lease payments | 13,745 | ||||||||
Less: Imputed interest | 2,853 | ||||||||
Less: Imputed interest | |||||||||
Less: Imputed interest | |||||||||
Total operating lease liabilities | $ | 10,892 | |||||||
Total operating lease liabilities | |||||||||
Total operating lease liabilities |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | $ | 761 | $ | 653 | |||||||
Six Months Ended June 30, | ||||||||
2023 | 2022 | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | $ | 1,319 | $ | 924 |
March 31, | |||||||||||
2024 | 2023 | ||||||||||
Weighted-average remaining lease term | 4.0 years | 5.1 years | |||||||||
Weighted-average discount rate | 9.9 | % | 9.7 | % |
June 30, | ||||||||
2023 | 2022 | |||||||
Weighted-average remaining lease term | 4.9 years | 5.9 years | ||||||
Weighted-average discount rate | 9.7 | % | 8.9 | % |
Outstanding principal | $ | 22,414 | ||
Venture debt termination fee | 2,250 | |||
Less: Debt discount | (642 | ) | ||
Less: Current portion of loan payable | (10,235 | ) | ||
Loan payable, net of current portion | $ | 13,787 | ||
Year ended: | ||||
2023 (remainder) | $ | 5,173 | ||
2024 | 10,345 | |||
2025 | 6,896 | |||
Total minimum principal payments | $ | 22,414 | ||
Number of Warrants | |||||||||||||||||||||||
Equity classified | Liability classified | Total | Weighted-average exercise price | ||||||||||||||||||||
Outstanding at December 31, 2023 | 74,420 | 966,393 | 1,040,813 | $ | 45.98 | ||||||||||||||||||
Exercises | (65,681) | — | (65,681) | 43.80 | |||||||||||||||||||
Outstanding at March 31, 2024 | 8,739 | 966,393 | 975,132 | $ | 46.12 |
Number of Warrants | ||||||||||||||||
Equity classified | Liability classified | Total | Weighted average exercise price | |||||||||||||
Outstanding at June 30, 2023 | 2,236,326 | 28,991,953 | 31,228,279 | $ | 1.53 | |||||||||||
Exercise of warrants | 975,132 | |||||||||||
Shares available for future stock incentive awards | 202,875 | |||||||||||
Unvested restricted stock units | 464,018 | |||||||||||
Outstanding common stock options | 1,347,618 | |||||||||||
17,808,670 | ||||||||||||
Outstanding Series A Preferred Stock options | 470,403 | |||||||||||
Total | 21,268,716 | |||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||||||||||||||
Research and development | $ | 712 | $ | 1,192 | ||||||||||||||||||||||||||||||||||
General and administrative | 719 | 1,084 | ||||||||||||||||||||||||||||||||||||
Total stock-based compensation expense | $ | 1,431 | $ | 2,276 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Research and development | $ | 2,677 | $ | 2,021 | $ | 3,869 | $ | 3,039 | ||||||||
General and administrative | 1,106 | 1,543 | 2,190 | 3,278 | ||||||||||||
Total stock-based compensation expense | $ | 3,783 | $ | 3,564 | $ | 6,059 | $ | 6,317 | ||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 3.95 | % | 3.95 | % | |||||||||||||||||||||||||||||||||||||
Dividend yield | — | — | |||||||||||||||||||||||||||||||||||||||
Expected term (in years) | 6.20 | 5.94 | |||||||||||||||||||||||||||||||||||||||
Expected volatility | 95.37 | % | 94.64 | % | |||||||||||||||||||||||||||||||||||||
Weighted-average fair value of common stock | $ | 19.78 | $ | 34.50 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Risk-free interest rate | 3.38 | % | 3.26 | % | 3.95 | % | 1.63 | % | ||||||||
Dividend yield | — | — | — | — | ||||||||||||
Expected term | 6.00 | 6.05 | 5.94 | 6.03 | ||||||||||||
Expected volatility | 94.40 | % | 92.03 | % | 94.64 | % | 91.85 | % | ||||||||
Weighted-average fair value of common stock | $ | 1.31 | $ | 1.29 | $ | 1.15 | $ | 3.10 |
Weighted-average | |||||||||||||||||||||||
Number of | remaining | Aggregate | |||||||||||||||||||||
common stock | Weighted-average | contractual term | intrinsic value | ||||||||||||||||||||
options | exercise price ($) | (in years) | (in thousands) | ||||||||||||||||||||
Outstanding at December 31, 2023 | 776,865 | $ | 2.97 | 6.50 | $ | 13,760 | |||||||||||||||||
Granted | 641,089 | $ | 19.78 | ||||||||||||||||||||
Exercised | (52,558) | $ | 2.93 | ||||||||||||||||||||
Forfeited | (17,778) | $ | 11.46 | ||||||||||||||||||||
Outstanding at March 31, 2024 | 1,347,618 | $ | 10.86 | 7.88 | $ | 11,827 | |||||||||||||||||
Vested at March 31, 2024 | 583,183 | $ | 2.98 | 5.90 | $ | 9,633 | |||||||||||||||||
Vested and expected to vest at March 31, 2024 | 1,200,826 | $ | 9.77 | 7.72 | $ | 11,827 | |||||||||||||||||
Number of options | Weighted-average exercise price ($) | Weighted-average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | |||||||||||||
Employees | ||||||||||||||||
Outstanding at December 31, 2022 | 15,578,412 | $ | 3.44 | 7.57 | $ | 4 | ||||||||||
Granted | 5,477,200 | $ | 1.15 | |||||||||||||
Forfeited | (1,207,712 | ) | $ | 2.84 | ||||||||||||
Outstanding at June 30, 2023 | 19,847,900 | $ | 2.85 | 7.93 | $ | 1 | ||||||||||
Vested at June 30, 2023 | 8,956,975 | $ | 3.92 | 6.68 | $ | 1 | ||||||||||
Vested and expected to vest at June 30, 2023 | 18,564,837 | $ | 2.93 | 7.84 | $ | 1 | ||||||||||
Non-employee consultants | ||||||||||||||||
Outstanding at December 31, 2022 | 266,239 | $ | 8.05 | 5.08 | $ | — | ||||||||||
Outstanding at June 30, 2023 | 266,239 | $ | 8.05 | 4.58 | $ | — | ||||||||||
Vested at June 30, 2023 | 266,239 | $ | 8.05 | 4.58 | $ | — | ||||||||||
Vested and expected to vest at June 30, 2023 | 266,239 | $ | 8.05 | 4.58 | $ | — |
Number of | Weighted-average | ||||||||||||||||||||||
Series A | remaining | Aggregate | |||||||||||||||||||||
Preferred Stock | Weighted-average | contractual term | intrinsic value | ||||||||||||||||||||
options | exercise price ($) | (in years) | (in thousands) | ||||||||||||||||||||
Outstanding at December 31, 2023 | 14,112.299 | $ | 79.94 | 5.91 | $ | 8,601 | |||||||||||||||||
Outstanding at March 31, 2024 | 14,112.299 | $ | 79.94 | 5.65 | $ | 8,043 | |||||||||||||||||
Vested at March 31, 2024 | 11,323.762 | $ | 73.14 | 5.05 | $ | 6,530 | |||||||||||||||||
Vested and expected to vest at March 31, 2024 | 14,112.299 | $ | 79.94 | 5.65 | $ | 8,043 | |||||||||||||||||
Number of shares | Weighted-average grant date fair value ($) | ||||||||||
Unvested at December 31, 2023 | — | $ | — | ||||||||
Granted | 471,104 | 19.80 | |||||||||
Forfeited | (7,086) | 19.80 | |||||||||
Unvested at March 31, 2024 | 464,018 | $ | 19.80 |
Number of shares | Weighted average grant date fair value ($) | |||||||
Unvested at December 31, 2022 | 1,705,558 | $ | 2.62 | |||||
Granted | 1,054,600 | 1.13 | ||||||
Vested | (277,193 | ) | 3.22 | |||||
Forfeited | (71,173 | ) | 1.99 | |||||
Unvested at June 30, 2023 | 2,411,792 | $ | 1.92 | |||||
Balance at | Balance at | ||||||||||||||||||||||
beginning of period | Additions | Deductions | end of period | ||||||||||||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||||||||
Contract liabilities: | |||||||||||||||||||||||
Deferred revenue | $ | 5,849 | $ | — | $ | (5,437) | $ | 412 | |||||||||||||||
Total contract liabilities | $ | 5,849 | $ | — | $ | (5,437) | $ | 412 |
Balance at | Balance at | |||||||||||||||
beginning of period | Additions | Deductions | end of period | |||||||||||||
Six Months Ended June 30, 2023 | ||||||||||||||||
Contract liabilities: | ||||||||||||||||
Deferred revenue | $ | 593 | $ | 10,500 | $ | (1,996 | ) | $ | 9,097 | |||||||
Total contract liabilities | $ | 593 | $ | 10,500 | $ | (1,996 | ) | $ | 9,097 | |||||||
Name | Shares of Series A Preferred Stock purchased | Total aggregate purchase price | ||||||||||||
Timothy A. Springer, Ph.D. | 99,140.326 | $ | 40,000,000 | |||||||||||
Name | Shares of common stock purchased | 2022 Warrants purchased | Total aggregate purchase price | |||||||||
TAS Partners, LLC (affiliate of Timothy A. Springer, Ph.D.) | 6,681,600 | 5,011,200 | $ | 9,421,056 |
Beginning Balance | Ending Balance | ||||||||||||||||||||||
December 31, 2023 | Charges | Payments | March 31, 2024 | ||||||||||||||||||||
Severance liability | $ | 3,896 | $ | 292 | $ | (3,320) | $ | 868 |
In April 2023, in light of current market conditions, our Board of Directors, or the Board, took steps to extend cash runway by pausing further development of SEL-302 for the treatment of methylmalonic acidemia,autoimmune diseases. We leverage our proprietary technology and manufacturing platform to introduce one or MMA, and conducting a targeted headcount reduction of approximately 25%. On August 17, 2023, we announced additional stepsmore mRNA molecules into cells to extend cash runway and maximize value for stockholders by continuing to prioritize development of SEL-212 and support ofenhance their function. Unlike DNA, mRNA degrades naturally over time without integrating into the cell’s genetic material. Therefore, our collaboration with Astellas Gene Therapies, or Astellas, for Xork, and pausing further development of all of our other clinical and preclinical product candidates that we are no longer actively advancing. We intend to seek collaboration partners for the assets in the development programs that we are no longer actively advancing.
Our Product Candidates
Our ImmTOR platform has a broad range of potential applications. Our product development strategy has historically been built on the following three distinct pillars.
Biologic therapies. BiologicmRNA cell therapies are distinguished by their capacity to be dosed repeatedly like conventional drugs, administered in an outpatient setting, and given without pre-treatment chemotherapy required with many conventional cell therapies. In an open-label Phase 2 clinical trial in patients with myasthenia gravis, or MG, a class of biologic drugs frequently used to treat rare diseases. Through our analysis of biologic drugs, including in our preclinical studies,chronic autoimmune disease that causes disabling muscle weakness and fatigue, we have observed that enzymes foreign to the human body, such as enzymes derived from microbes or replacement enzymes in the case of patients that are deficient in the specific enzyme, are especially prone to causing undesired immune responses. Our partneredour lead product candidate, Descartes-08, generated a deep and durable clinical benefit.
Gene therapies. We believe gene therapies have the potentialbe administered off-the-shelf to address key unmet medical needs for many rare genetic diseases, but undesired immune responses to the viral vectors used for gene replacement, augmentation and editing may be restricting their broader use. AAV immunogenicity and AAV toxicity represent two major challenges for the gene therapy field; any patient. Our mRNA
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AAV gene therapy is thought to contribute to observations of hepatotoxicity, which has been associated with loss of transgene expression. The formation of neutralizing antibodies against AAV after initial treatment with AAV mediated gene therapies effectively prevents the possibility of re-dosing in patients who may benefit from additional doses due to either the failure to achieve therapeutic benefit or loss of transgene expression over time. Additionally, a significant number of patients who would benefit from treatment by gene therapies are ineligible due to pre-existing immunity to the AAV vectors from a natural infection. This preexisting immunity could potentially be addressed through an IgG protease pre-treatment to open a dosing window for AAV gene therapies. We believe that the combination of ImmTOR and Xork could simultaneously address the two key issues facing the AAV gene therapy modality and make them more accessible while also making them safer and more durable.
Tolerogenic Therapies for Autoimmune Diseasesitu : Autoimmune diseases are caused by a breakdown in natural tolerance to our own self-antigens. With over 24 million Americans afflicted with autoimmune diseases, there is a large unmet medical need. As the ImmTOR platformmodality is designed to inducedeliver mRNA into a patient’s lymph node to generate CAR-T cells and other proteins that target autoimmunity.
In our preclinical studies, we observed that ImmTOR combined with a Treg-selective IL-2 molecule exhibited substantial synergistic activity in increasing the percentage and durability of total Treg expansion in the spleen. We believe that this combination has the potential to be a best-in-class therapy in diseases where expansion of total Treg may prove beneficial. This antigen specificity differentiates ImmTOR-IL from other IL-2 molecule approachesprivate Delaware corporation which, do not show an antigen specific T-cell expansion. Thus, we believe that not only is ImmTOR-IL a potentially best in class IL-2 where generalized T cell expansion can be beneficial, but also a “first in class” antigen specific IL-2 therapy.
Biologic Therapies – Chronic Refractory Gout
SEL-212 consists of ImmTOR co-administered with pegadricase. Our pegadricase consists of a yeast-derived uricase modified with polyethylene glycol moieties. Uricase is an enzyme endogenous to all mammals, except for humans and certain primates, which converts serum urateimmediately prior to the more soluble metabolite, allantoin. There is a natural limit to the amount of serum urate that can be excreted by the kidneys, which decreases with age and can be reduced by some medications. By converting serum urate to allantoin, uricase provides an additional way for the body to reduce serum urate.
On March 21, 2023, we announced top-line data from the Phase 3 DISSOLVE I and II trials. Top-line results include:
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On July 10, 2023,Merger (as defined below), was known as required under the Sobi License, we transferred control and ownership of the investigational new drug applications, or INDs, associated with SEL-212 to Sobi.
We estimate that peak sales of SEL-212, if approved, could reach over $700 million.
Gene Therapies – Methylmalonic Acidemia
Our lead therapeutic gene therapy program, SEL-302, is intended to use ImmTOR to enhance the treatment of methylmalonic acidemia, or MMA, an inherited disorder in which the body is unable to process certain proteins and fats (lipids) properly. This program was previously being conducted under our collaboration with Asklepios Biopharmaceutical,Cartesian Therapeutics, Inc., or AskBio. In October and November 2020, we received rare pediatric disease designation and orphan drug designation, respectively, from the Food and Drug Administration, or the FDA, for SEL-302, for the treatment of MMA due to methylmalonyl-CoA mutase, or MMUT gene mutations. See “—Licenses and Collaborations — Asklepios Biopharmaceutical, Inc.” for more information. In April 2021, we were notified by AskBio that it intended to opt-out of development of the MMA indication. The feasibility study and license agreement with AskBio, or AskBio Collaboration Agreement, otherwise remains in effect. We filed an IND to conduct a Phase 1/2 clinical trial of our SEL-302 product candidate in pediatric patients with methylmalonic acidemia in the third quarter of 2021. ImmTOR manufacturing, controlled by us, continues to proceedOld Cartesian, in accordance with our expectationsthe terms of an Agreement and we have not observed any impact to anyPlan of our ImmTOR programs. In December 2022, we initiated ReiMMAgine,Merger, or the Phase 1/2 clinical trialMerger Agreement, by and among
Gene Therapies – IgG Protease (Xork)
We have exclusively licensed Xork, an IgG-specific protease from Genovis AB (publ.),Selecta, or Genovis, an enzyme technology company. We plan to develop Xork, either alone or in combination with our ImmTOR platform, with the goal of enabling the dosing of transformative gene therapies in patients with pre-existing AAV immunity due to natural exposures to AAV viruses. Currently, significant proportions of the potential patient populations for many gene therapy trials are ineligible for treatment by AAV mediated gene therapies due to pre-existing antibodies which limits transduction efficiency of the therapySecond Merger Sub, and could trigger potentially dangerous immune responses. IgG proteases are derived from bacteria. Xork exhibits low cross-reactivity to antibodies in normal human serum and is differentiated from IgG proteases derived from Streptococcus pyogenes, a common human pathogen.
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In January 2023, we entered into an exclusive licensing and development agreement for Xork to be developed for use with AT845, Astellas’ investigational AAV-based treatment for Pompe disease in adults. We are responsible for the early development activities and manufacturing of Xork and will maintain the rights for the development of additional indications beyond Pompe disease. We intend to work to satisfy our remaining contractual obligations in connection with our partnership with Astellas.
Tolerogenic Therapies for Autoimmune Disease – ImmTOR & ImmTOR-IL
We believe our ImmTOR platform shows potential to treat autoimmune diseases. In preclinical studies, we have observed ImmTOR’s ability to induce antigen-specific T regulatory cells. We believe that ImmTOR, in combination with an autoantigen of interest, could create self-tolerance to auto-antigens and thus be a novel approachOld Cartesian. Pursuant to the treatmentMerger Agreement, First Merger Sub merged with and into Old Cartesian, pursuant to which Old Cartesian was the surviving corporation and became a wholly owned subsidiary of autoimmune diseases.
Additionally, in preclinical studies we have observed ImmTOR, in combination with IL-2 molecules, expanding T-regulatory cells beyond IL-2 alone and we intend to pursue a combination of ImmTOR and IL-2, which we refer to as ImmTOR-IL, in diseases for which general T cell expansion has shown a therapeutic benefit. Additionally, we have observed in preclinical studies that the combination of ImmTOR, a Treg-selective IL-2 molecule and an antigen, exhibited substantial synergistic activity in inducing and expanding antigen specific regulatory T cells when ImmTOR and IL-2 is combined with an antigen of interest. We have paused further development of ImmTOR-IL product candidates.
Cyrus Biotechnology, Inc., or Cyrus, is engineering a proprietary IL-2 protein to combine with the ImmTOR platform to potentially mitigate unwanted immune responses by reducing the inherent immunogenicity of the protein while also promoting immune tolerance. The IL-2 pathway influences critical aspects of both immune stimulation and immune regulation, through the development and expansion of Treg cells. These Treg cells are a specialized subpopulation of T cells involved in suppressing certain immune responses and maintaining the body’s self-tolerance. In preclinical studies investigating the effects of ImmTOR in combination with a Treg-selective IL-2 molecule we have observed a substantial synergistic activity in increasing the percentage and durability of Treg expansion in the spleen.
Licenses and Collaborations
In-licenses
Ginkgo Bioworks Holdings, Inc.
In October 2021, we entered into a Collaboration and License Agreement,Selecta, or the First Ginkgo Agreement, with Ginkgo Bioworks Holdings, Inc., or Ginkgo. UnderMerger. Immediately following the First Ginkgo Agreement, Ginkgo will design next generation IgA proteasesMerger, Old Cartesian merged with potentially transformative therapeutic potential. In return, Ginkgo is eligibleand into Second Merger Sub, pursuant to earn both upfront research and development fees and milestone payments, including certain milestone payments inwhich Second Merger Sub was the form of our common stock, clinical and commercial milestone payments of up to $85 million in cash, as well as downstream value in the form of royalties on sales.
In January 2022, we entered into a Collaboration and License Agreement,surviving entity, or the Second Ginkgo Agreement,Merger and, together with Ginkgo. Under the Second Ginkgo Agreement, we and Ginkgo collaborate to design novel AAV capsids with potentially improved transduction, enhanced tissue tropism and reduced immunogenicity. In return, Ginkgo is eligible to earn both upfront research and development fees and milestone payments, including certain milestone payments in the form of our common stock, clinical and commercial milestone payments of up to $207 million in cash for each of a specified number of products which have the potential to total, in the aggregate, up to $1.1 billion. Ginkgo is also entitled to potential further downstream value in the form of royalties on sales.
In June 2022, we were notified of the achievement of the midpoint of the technical development plan under the First Ginkgo Agreement by Ginkgo. In July 2023, we mutually agreed with Ginkgo thatMerger, the completion of the technical development plan’s midpoint task under the Second Ginkgo Agreement had been achieved as of June 2023.
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Genovis AB (publ.)
In October 2021, we entered into a strategic licensing agreement with Genovis, or the Genovis Agreement. Under the Genovis Agreement, we paid to Genovis an upfront payment in exchange for an exclusive license to Genovis’ Xork enzyme technology for all therapeutic uses in humans, excluding research, preclinical, diagnostic, and other potential non-therapeutic applications of the enzyme. Genovis is eligible to earn development and sales-based milestones and sub-licensing fees, as well as tiered royalties on worldwide sales in the low double digits. Outside of the remaining contractual obligations under our partnership with Astellas, we have paused further development of Xork product candidates.
Cyrus Biotechnology, Inc.
In September 2021, we entered into a Collaboration and License Agreement with Cyrus, or the Cyrus Agreement, pursuant to which Cyrus agreed to grant us an exclusive, worldwide license to certain intellectual property in order to form a protein engineering collaboration combining the ImmTOR platform with Cyrus’ engineered protein therapeutics. We expect that novel engineered protein therapeutic candidates from the partnership will be used to expand our proprietary pipeline and further bolster the ImmTOR platform. In return for the licensed intellectual property, we made an upfront payment and will pay certain discovery, development, and sales-based milestones which could potentially total up to approximately $1.5 billion across multiple programs.
In June 2022, we mutually agreed with Cyrus that the preclinical key in-vitro success milestone had been achieved. We intend to pause further development of product candidates involving Cyrus’ engineered protein therapeutics.
Out-licenses
Astellas Gene Therapies
In January 2023, we entered into a License and Development Agreement with Astellas. Under this agreement, Astellas obtained the sole and exclusive right to commercialize Xork for use in Pompe disease in combination with an Astellas gene therapy investigational or authorized product, with a current focus on AT845.Merger. In connection with entry into this agreement, we received a $10 million upfront paymentthe Second Merger, Old Cartesian changed its name to Cartesian Bio, LLC. In connection with the Merger and are eligible to receive $340.0 million for certain additional development and commercial milestones plus royalties on any potential commercial sales where Xork is used as a pre-treatment for AT845. As a result of the sublicense of Xork to Astellas, we made a $4.0 million payment to Genovis in February 2023.
Takeda Pharmaceuticals USA, Inc.
In October 2021, we entered into a strategic licensing agreement, or the Takeda Agreement, with Takeda Pharmaceuticals USA, Inc., or Takeda. Under the Takeda Agreement, we granted Takeda an exclusive license to our ImmTOR technology initially for two specified disease indications within the field of lysosomal storage disorders. Under the terms of the Takeda Agreement, we received an upfront payment and are entitled to receive up to $1.124 billion in future additional payments over the course of the partnership that are contingent on the achievement of development or commercial milestones or Takeda’s election to continue its activities at specified development stages. We are also eligible for tiered royalties on future commercial sales of any licensed products. In June 2023, we received a payment of $0.5 million for the achievement of a certain non-clinical milestone. In April 2023, we were notified by Takeda of its intention to terminate the Takeda Agreement effective July 25, 2023.
Swedish Orphan Biovitrum AB (publ.)
In June 2020, we announced that we had entered into a License and Development Agreement, or the Sobi License, with Sobi pursuant to which we agreed to grant Sobi an exclusive, worldwide (except as to Greater China) license to develop, manufacture and commercialize SEL-212, which is currently in development for the treatment of chronic refractory gout. In September 2020, pursuant to the Sobi License, Sobi paid us a one-time, upfront paymentMerger Agreement, the Company changed its corporate name to Cartesian Therapeutics, Inc. See Note 3 of $75 million. Sobi has also agreed to make milestone payments totaling up to $630 million to us upon the achievement of various development and regulatory milestones and sales thresholds for annual net sales of SEL-212, and tiered royalty payments ranging from the low double digits on the lowest sales tieraccompanying notes to the high teens onunaudited consolidated financial statements appearing elsewhere in this Quarterly Report for additional information regarding the highest sales tier. In July 2022, we received $10.0 million for the completionMerger.
Additionally, in 2020, Sobi purchased an aggregate of 5,416,390 shares of our common stock at a purchase price of $4.6156 per share for aggregate gross proceeds of $25 million, which we refer to as the Sobi Private Placement.
Under the Sobi License, we have operational oversight of the Phase 3 DISSOLVE clinical program of SEL-212Contents
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Sarepta Therapeutics, Inc.
In June 2020, we entered into a research license and option agreement, or the Sarepta Agreement, with Sarepta Therapeutics, Inc., or Sarepta. Pursuant to the Sarepta Agreement, we granted Sarepta a license to research and evaluate ImmTOR in combination with Sarepta’s AAV gene therapy or gene editing technology, using viral or non-viral delivery, or the Sarepta Product, to treat Duchenne Muscular Dystrophy and certain Limb-Girdle Muscular Dystrophy subtypes, or the Sarepta Indications. Sarepta had an option term of 24 months during which it was permitted to opt-in to obtain an exclusive license to further develop and commercialize the Sarepta Product to treat at least one Sarepta Indication, with a potential to extend the option term if Sarepta paid an additional fee to us. Sarepta made an upfront payment to us upon signing of the Sarepta Agreement, and we were eligible to receive additional payments under the option term. If Sarepta opted-in to an exclusive license agreement, we could have received option exercise payments per indication and we would have been entitled to significant development and commercial milestone payments and tiered royalties ranging from the mid-to-high single digits based on net sales.
In June 2021, we received a payment of $3.0 million for the achievement of certain preclinical milestones. In August 2022, we received a payment of $2.0 million in exchange for a nine-month extension to Sarepta’s options to both Sarepta Indications and a payment of $4.0 million for the achievement of certain non-clinical milestones. In March 2023, we were notified by Sarepta that Sarepta would not be exercising its exclusive option under the Sarepta Agreement.
Asklepios Biopharmaceutical, Inc.
Feasibility Study and License Agreement
In August 2019, we entered into the AskBio Collaboration Agreement. The initial product candidate being developed under this collaboration is gene therapy for MMA, which is a disease that can cause severe developmental defects and premature death as a result of an accumulation of toxic metabolites. We previously conducted preclinical studies for this product candidate and will leverage that previous work within the collaboration. In April 2021, we were notified by AskBio that it intended to opt-out of development of the MMA indication. The AskBio Collaboration Agreement otherwise remains in effect, although we have paused further development of SEL-302 for the treatment of MMA.
Impact of Global Events
COVID-19
We continue to closely monitor how the COVID-19 pandemic is affecting our employees, business, preclinical studies and clinical trials. Disruptions caused by the COVID-19 pandemic may result in difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical trials, and the incurrence of unforeseen costs as a result of supply chain, preclinical study or clinical trial delays.
While the COVID-19 pandemic has not had a material impact on our clinical programs as of the date of this Quarterly Report, it could have an impact on our ability to commence and conduct preclinical studies and clinical trials of our IgA nephropathy, gene therapy, and autoimmune disease programs, and our ability to obtain supply of both active drug substances and finished drug product as well as efficient execution of the overall supply chain for SEL-212 and our other programs.
At this time, any impact of COVID-19 on our business, revenues, results of operations and financial condition will largely depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, the emergence of new virus variants, travel restrictions and social distancing in the United States and other countries, business closures, disruptions, mandated stay at home orders or lockdowns, supply chain disruptions, the ultimate impact on financial markets and the global economy, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
Financial Operations
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Except for the year ended December 31, 2022, we have incurred significant operating losses since our inception. We incurred a net loss of $33.1$56.8 million and had net income of $37.4$21.7 million for the sixthree months ended June 30,March 31, 2024 and 2023, and 2022, respectively. As of June 30, 2023,March 31, 2024, we had an accumulated deficit of $428.0$671.5 million.
In April 2023, in light of current market conditions, our Board took steps to extend cash runway by pausing further development of SEL-302 for the treatment of MMA and conducting a targeted headcount reduction of approximately 25%. On August 17, 2023, we announced additional steps to extend cash runway and maximize value for stockholders by continuing to prioritize development of SEL-212 and support of our collaboration with Astellas for Xork, and pausing further development of all of our other clinical and preclinical product candidates that we are no longer actively advancing. We intend to seek collaboration partners for the assets in the development programs that we are no longer actively advancing. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we:
•advance Descartes-08 for MG into Phase 3 development;
assess ways to maximize value and support further development of ourclinical-stage product candidates, other than SEL-212 and Xork, through potential partnerships;
•seek regulatory approvals for any product candidates that successfully complete clinical trials; and
•maintain, expand and protect our intellectual property portfolio, including through licensing arrangements.
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We expense research and development costs as incurred. Conducting a significant amount of research and development is central to our business model. Product candidates in clinical development generally have higher development costs than those in earlier stages of development, primarily due to the size, duration and cost of clinical trials. The successful development of
In March 2024, we were notified by Astellas of its intention to terminate the Astellas Agreement, effective June 6, 2024.
income.
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Results of Operations
The following is a comparison
Three Months Ended June 30, | Increase | |||||||||||||||
2023 | 2022 | (decrease) | ||||||||||||||
Collaboration and license revenue | $ | 5,249 | $ | 39,273 | $ | (34,024 | ) | (87 | )% |
During the three months ended June 30, 2023, collaboration and licensea decrease of $0.1 million, or 2%. The decrease was primarily due to a decrease of revenue was $5.2 million, compared to $39.3 million in 2022. During the three months ended June 30, 2023 and 2022, we recognized $4.3 million and $29.2 million, respectively, under the license agreement with Sobi License resulting from both the shipment of clinical supply and the reimbursement of costs incurred for the Phase 3 DISSOLVE clinical program. Additionally, duringprogram offset by an increase in revenue recognized under the Astellas Agreement.
Research and development expenses
The following is a comparison of research and development expenses for the three months ended June 30, 2023 and 2022 (in thousands, except percentages):
Three Months Ended June 30, | Increase | |||||||||||||||
2023 | 2022 | (decrease) | ||||||||||||||
Research and development | $ | 17,782 | $ | 19,182 | $ | (1,400 | ) | (7 | %) |
During the three months ended June 30, 2023,March 31, 2024
General and administrative expenses
The following is a comparison of general and administrative expenses
Three Months Ended June 30, | Increase | |||||||||||||||
2023 | 2022 | (decrease) | ||||||||||||||
General and administrative | $ | 6,105 | $ | 6,231 | $ | (126 | ) | (2 | %) |
During the three months ended June 30, 2023, our general and administrative expenses decreased by $0.1March 31, 2024 was $1.2 million, or 2%, as compared to the three months ended June 30, 2022. The decrease in costs was primarily the result of a reduction in expenses incurred for stock compensation, partially offset by a one-time cash charge to salaries and benefits as a result of our headcount reduction in April 2023.
Investment income
Investment income was $1.4 million and $0.2$1.3 million for the three months ended June 30, 2023 and 2022, respectively.March 31, 2023. The increasedecrease in investment income was due to increaseddecreased investment and higher interest rates.
balance.
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Interest expense
Interest
facilities that were extinguished during the year ended December 31, 2023.
Other income, net
Other income, net consists primarily of sublease income for the three months ended June 30,March 31, 2023, and was de minimis for the three months ended June 30, 2022.
Net (loss) income
Net loss for the three months ended June 30, 2023 was $11.4 million compared to net incomea decrease of $8.6 million for the three months ended June 30, 2022.
Comparison of the Six Months Ended June 30, 2023 and 2022
Collaboration and license revenue
The following is a comparison of collaboration and licenserevenue for the six months ended June 30, 2023 and 2022 (in thousands, except percentages):
Six Months Ended June 30, | Increase | |||||||||||||||
2023 | 2022 | (decrease) | ||||||||||||||
Collaboration and license revenue | $ | 11,187 | $ | 73,272 | $ | (62,085 | ) | (85 | )% |
During the six months ended June 30, 2023 and 2022, we recognized $8.7 million and $52.9 million under the Sobi License resulting from the shipment of clinical supply and the reimbursement of costs incurred for the Phase 3 DISSOLVE clinical program. Additionally, during the six months ended June 30, 2023, $1.4 million was recognized under the Astellas Agreement and $0.6 million was recognized under the Takeda Agreement, and $0.5 million was recognized under the Sarepta Agreement. During the six months ended June 30, 2022, $10.2 million was recognized under the Sarepta Agreement, $9.2 million was recognized upon the mutual termination of the Spark License Agreement, and $1.0 million was recognized under the Takeda Agreement.
Research and development expenses
The following is a comparison of research and development expenses for the six months ended June 30, 2023 and 2022 (in thousands, except percentages):
Six Months Ended June 30, | Increase | |||||||||||||||
2023 | 2022 | (decrease) | ||||||||||||||
Research and development | $ | 36,406 | $ | 36,871 | $ | (465 | ) | (1 | )% |
During the six months ended June 30, 2023, our research and development expenses decreased by $0.5$5.1 million, or 1%, as compared to the six months ended June 30, 2022. The decrease in cost was primarily the result of the strategic reprioritization in April 2023, partially offset by increased contract license and milestone payments and a one-time cash charge to salaries and benefits as a result of our headcount reduction in April 2023.
37
General and administrative expenses
The following is a comparison of general and administrative expenses for the six months ended June 30, 2023 and 2022 (in thousands, except percentages):
Six Months Ended June 30, | Increase | |||||||||||||||
2023 | 2022 | (decrease) | ||||||||||||||
General and administrative | $ | 11,800 | $ | 11,768 | $ | 32 | — | % |
During the six months ended June 30, 2023, our general and administrative expenses increased by less than $0.1 million as compared to the six months ended June 30, 2022. The increase in costs was primarily driven by a one-time cash charge to salaries and benefits as a result of our headcount reduction in April 2023 partially offset by a reduction in expenses incurred for stock compensation.
Investment income
Investment income was $2.7 million and $0.2 million, for the six months ended June 30, 2023 and 2022, respectively. The increase in investment income was due to increased investments and higher interest rates.
Foreign currency transaction gain (loss)
We recognized de minimis foreign currency fluctuations during the six months ended June 30, 2023 and 2022, respectively.
Interest expense
Interest expense was $1.6 million and $1.4 million for the six months ended June 30, 2023 and 2022, respectively, representing interest expense and amortization of the carrying costs of our credit facilities.
Change in fair126%. Fair value of warrant liabilities
For was determined utilizing the six months ended June 30, 2023, we recognized $2.3 million of income for the decrease in the fair value of warrant liabilities utilizing a Black-Scholes valuation methodology. The decrease in warrant value was primarily driven by a decrease in the remaining expected lifeper-share price of the warrants. our common stock.
stock since December 31, 2023 through settlement. The remaining Series A Preferred Stock forward contract liability was settled during the three months ended March 31, 2024. There was no Series A Preferred Stock forward contract liability prior to the Merger and as such, no change in the fair value of the Series A Preferred Stock forward contract liability is reflected in our unaudited consolidated financial statements for the three months ended March 31, 2023.
Othernet
loss
March 31, 2023, a decrease of $35.1 million or 162%. The change was primarily due to expenses associated with the change in the fair value of the CVR liability and Series A Preferred Stock forward contract liability and increased general and administrative expenses, partially offset by decreased research and development expenses and income associated with the change in the fair value of the warrant liabilities.
Since inception, We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we have financedwill need additional capital to fund our operations, withwhich we may raise through a combination of issuance of preferredequity offerings, debt financings, third-party funding, potential royalty and/or milestone monetization transactions and common stock, government grant funding, borrowings under credit facilitiesother collaborations and proceeds from our collaboration and license agreements.
strategic alliances.
38
Indebtedness
On March 21, 2022, we entered into a Second Amendment to Loan and Security Agreement, or the Second Amendment. The Second Amendment extends the date on which amortization payments in respect of the 2020 Term Loan will commence to April 1, 2023. Thereafter, amortization payments will be paid monthly in equal installments of principal and interest to fully amortize the outstanding principal over the remaining term of the 2020 Term Loan, subject to recalculation upon a change in the prime rate. The Second Amendment was determined to be a loan modification, and the $0.1 million fee was recorded as an addition to the debt discount on the effective date.
On September 20, 2022, we entered into a Third Amendment to the Loan and Security Agreement or the Third Amendment. The Third Amendment was entered into in connection with the expansion of our corporate headquarters to provide for an increase of $0.2 million in the letter of credit for a total of $1.6 million which renews automatically each year.
On March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation, or the FDIC, was appointed as receiver. On March 13, 2023, the FDIC announced that all of Silicon Valley Bank’s deposits and substantially all of its assets had been transferred to a newly created, full-service FDIC-operated bridge bank, Silicon Valley Bridge Bank, N.A., or SVBB. SVBB assumed all loans that were previously held by Silicon Valley Bank. On March 27, 2023, First-Citizens Bank & Trust Company assumed all of SVBB’s customer deposits and certain other liabilities and acquired substantially all of SVBB’s loans and certain other assets from the FDIC.
On March 31, 2023, we entered into a Fourth Amendment to Loan and Security Agreement or the Fourth Amendment,payoff letter with Oxford as collateral agent and a lenderFinance LLC and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (successor by purchase to the Federal Deposit Insurance Corporation as Receiver for Silicon Valley Bridge Bank, N.A.SVBB (as successor to Silicon Valley Bank)), or SVB.the lenders under the term loan, pursuant to which we paid all outstanding amounts under such term loan, together with accrued interest and a prepayment penalty, resulting in the full extinguishment of such term loan. The Fourth Amendment relieved ustotal payoff amount was $22.3 million, consisting of the requirement to maintain all Collateral Accounts (as such term is definedremaining principal amount due of $19.8 million, the final payment fee of $2.3 million, the prepayment penalty of $0.2 million, and less than $0.1 million of accrued interest.
The 2020 Term Loan is secured by a lien on substantially all of our assets, other than intellectual property, provided that such lien on substantially all assets includes any rights to payments and proceeds from the sale, licensing or disposition of intellectual property. We also granted Oxford a negative pledge with respect to our intellectual property.
The 2020 Term Loan contains customary covenants and representations, including but not limited to financial reporting obligations and limitations on dividends, indebtedness, collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, deposit accounts, and subsidiaries. The 2020 Term Loan also contains other customary provisions, such as expense reimbursement, non-disclosure obligations as well as indemnification rights.
The events of default under the 2020 Term Loan include, but are not limited to, our failure to make any payments of principal or interest under the 2020 Term Loan or other transaction documents, our breach or default in the performance of any covenant under the 2020 Term Loan or other transaction documents, the occurrence of a material adverse event, making a false or misleading representation or warranty in any material respect under the 2020 Term Loan, our insolvency or bankruptcy, any attachment or judgment on our assets of at least approximately $0.5 million, or the occurrence of any default under any of our agreements or obligations involving indebtedness in excess of approximately $0.5 million. If an event of default occurs, Oxford is entitled to take enforcement action, including acceleration of amounts due under the 2020 Term Loan. Iffuture we raise any additionalseek debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.
flexibility by imposing liens on our assets and covenants on the operation of our business.
39
As of June 30, 2023,March 31, 2024, we had an accumulated deficit of $428.0$671.5 million. In April 2023, in light of current market conditions, our Board took steps to extend cash runway by pausing further development of SEL-302 for the treatment of MMA and conducting a targeted headcount reduction of approximately 25%. On August 17, 2023, we announced additional steps to extend cash runway and maximize value for stockholders by continuing to prioritize development of SEL-212 and support of our collaboration with Astellas for Xork, and pausing further development of all of our other clinical and preclinical product candidates that we are no longer actively advancing. We intend to seek collaboration partners for the assets in the development programs that we are no longer actively advancing. We intend to continue evaluating our development programs and operating expenses on an ongoing basis. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of our product candidates, conducting preclinical studies and clinical trials, and our administrative organization. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.
our collaboration agreements remaining in effect, our entering into additional collaboration agreements and our ability to achieve milestones under these agreements;
the cost of manufacturing clinical supplies of our product candidates;
the size of our headcount and associated costs;
•the scope, progress, results and costs of our clinical trials, preclinical development, manufacturing, laboratory testing and clinical trials for logistics;
•the costs, timing and outcome of regulatory review of our product candidates;
•the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;
40
•the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
•the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and
•the effect of competing technological and market developments..
Six Months Ended June 30, | ||||||||
(In thousands) | 2023 | 2022 | ||||||
Cash (used in) and provided by: | ||||||||
Operating activities | $ | (18,660 | ) | $ | (24,135 | ) | ||
Investing activities | 28,112 | 9,446 | ||||||
Financing activities | (2,437 | ) | 38,603 | |||||
Effect of exchange rate changes on cash | (49 | ) | 86 | |||||
|
|
|
| |||||
Net change in cash, cash equivalents, and restricted cash | $ | 6,966 | $ | 24,000 | ||||
|
|
|
|
Three Months Ended March 31, | ||||||||||||||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||||||||||||||
Cash (used in) and provided by: | ||||||||||||||||||||||||||
Operating activities | $ | (15,917) | $ | (8,765) | ||||||||||||||||||||||
Investing activities | (602) | 28,124 | ||||||||||||||||||||||||
Financing activities | 43,031 | 149 | ||||||||||||||||||||||||
Effect of exchange rate changes on cash | (5) | (21) | ||||||||||||||||||||||||
Net change in cash, cash equivalents, and restricted cash | $ | 26,507 | $ | 19,487 |
Investing activities
Net cash provided by investing activities for the sixthree months ended June 30, 2023March 31, 2024 was $28.1$0.6 million compared to net cash provided by investing activities of $9.4$28.1 million for the three months ended March 31, 2023, a decrease of $28.7 million. The net cash used in investing activities for the same period in 2022.three months ended March 31, 2024 consisted primarily of purchases of property and equipment. The net cash provided by investing activities for each of the sixthree months ended June 30,March 31, 2023 and 2022 was primarily proceeds from the maturities of marketable securities offset by purchases of property and equipment.
41
Critical Accounting Policies and Use of Estimates
2023.
March 31, 2024 because of the material weakness in internal control over financial reporting discussed below.
42
None.
None.
43
Incorporated by Reference | ||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | |||||
3.1(a) | Restated Certificate of Incorporation of Selecta Biosciences, Inc. | 8-K | 001-37798 | 3.1 | 6/29/2016 | |||||
3.1(b) | Certificate of Amendment to the Restated Certificate of Incorporation of Selecta Biosciences, Inc., dated June 21, 2022 | 8-K | 001-37798 | 3.1 | 6/21/2022 | |||||
3.2 | Amended and Restated By-laws of Selecta Biosciences, Inc. | 8-K | 001-37798 | 3.2 | 8/22/2022 | |||||
31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | — | — | — | Filed herewith | |||||
31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | — | — | — | Filed herewith | |||||
32.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | — | — | — | Furnished herewith | |||||
101.INS | Inline XBRL Instance Document (the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document) | — | — | — | Filed herewith | |||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | — | — | — | Filed herewith | |||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | — | — | — | Filed herewith | |||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | — | — | — | Filed herewith | |||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | — | — | — | Filed herewith | |||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | — | — | — | Filed herewith | |||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | — | — | — | Filed herewith |
44
Incorporated by Reference | ||||||||||||||||||||||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | |||||||||||||||||||||||||||
2.1* | 8-K | 001-37798 | 2.1 | 11/13/2023 | ||||||||||||||||||||||||||||
8-K | 001-37798 | 3.1 | 6/29/2016 | |||||||||||||||||||||||||||||
8-K | 001-37798 | 3.1 | 6/21/2022 | |||||||||||||||||||||||||||||
8-K | 001-37798 | 3.3 | 11/13/2023 | |||||||||||||||||||||||||||||
8-K | 001-37798 | 3.2 | 3/28/2024 | |||||||||||||||||||||||||||||
8-K | 001-37798 | 3.2 | 11/13/2023 | |||||||||||||||||||||||||||||
8-K | 001-37798 | 3.4 | 11/13/2023 | |||||||||||||||||||||||||||||
8-K | 001-37798 | 3.1 | 3/28/2024 | |||||||||||||||||||||||||||||
10.1# | 8-K | 001-37798 | 10.1 | 4/1/2024 | ||||||||||||||||||||||||||||
10.2# | 8-K | 001-37798 | 10.2 | 4/1/2024 | ||||||||||||||||||||||||||||
10-K | 001-37798 | 10.12 | 3/7/2024 | |||||||||||||||||||||||||||||
- | - | - | Filed herewith | |||||||||||||||||||||||||||||
- | - | - | Filed herewith | |||||||||||||||||||||||||||||
- | - | - | Filed herewith | |||||||||||||||||||||||||||||
- | - | - | Furnished herewith | |||||||||||||||||||||||||||||
101.INS | Inline XBRL Instance Document (the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document) | - | - | - | Filed herewith | |||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | - | - | - | Filed herewith | |||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | - | - | - | Filed herewith | |||||||||||||||||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | - | - | - | Filed herewith |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | - | - | - | Filed herewith | |||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | - | - | - | Filed herewith | |||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | - | - | - | Filed herewith |
Date: | By: | /s/ Carsten Brunn, Ph.D. | |||||||||||||
Carsten Brunn, Ph.D. | |||||||||||||||
President and Chief Executive Officer, and Director | |||||||||||||||
(Principal Executive Officer) | |||||||||||||||
Date: | By: | /s/ Blaine Davis | |||||||||||||
Blaine Davis | |||||||||||||||
Chief Financial Officer | |||||||||||||||
(Principal Financial Officer) | |||||||||||||||