What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-07 · 108 added, 65 removed, 368 unchanged (32% of the section changed)

Financial Statements

ACLARIS THERAPEUTICS, IN C.

ACLARIS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEET S

19 unchanged sentences

Preferred stock, $ 0.00001 par value;

10,000,000 shares authorized and no shares issued or outstanding at March 31, 2024 and December 31, 2023

10,000,000 shares authorized and no shares issued or outstanding at June 30, 2024 and December 31, 2023

Common stock, $ 0.00001 par value;

200,000,000 shares authorized at March 31, 2024 and December 31, 2023;

71,248,017 and 70,894,889 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

200,000,000 shares authorized at June 30, 2024 and December 31, 2023;

71,332,825 and 70,894,889 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid‑in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Contract research

11 unchanged sentences

Other comprehensive loss:

Unrealized (loss) gain on marketable securities, net of tax of $ 0

Total other comprehensive (loss) gain

Unrealized loss on marketable securities, net of tax of $ 0

Total other comprehensive loss

Comprehensive loss

11 unchanged sentences

Balance at March 31, 2024

Issuance of common stock in connection with vesting of restricted stock units

Unrealized loss on marketable securities

Stock-based compensation expense

Balance at June 30, 2024

Comprehensive

5 unchanged sentences

Balance at March 31, 2023

Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units

Issuance of common stock under at-the-market sales agreement, net of offering costs of $ 826

Unrealized loss on marketable securities

Stock-based compensation expense

Balance at June 30, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities :

10 unchanged sentences

Cash flows from investing activities:

Purchases of property and equipment

Purchases of property and equipment, net

Purchases of marketable securities

2 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common stock under the at-the-market sales agreement, net of issuance costs

Payments of employee withholding taxes related to restricted stock unit award vesting

Net cash used in financing activities

Proceeds from exercise of employee stock options and the issuance of stock

Net cash (used in) provided by financing activities

Net decrease in cash and cash equivalents

16 unchanged sentences

The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business.

As of March 31, 2024, the Company had cash, cash equivalents and marketable securities of $ 161.4 million and an accumulated deficit of $ 787.7 million.

As of June 30, 2024, the Company had cash, cash equivalents and marketable securities of $ 149.9 million and an accumulated deficit of $ 798.7 million.

Since inception, the Company has incurred net losses and negative cash flows from its operations.

Prior to the acquisition of Confluence Life Sciences, Inc.

(now known as Aclaris Life Sciences, Inc.) (“Confluence”) in 2017, the Company had never generated revenue.

There can be no assurance that profitable operations will ever be achieved, and, if achieved, will be sustained on a continuing basis.

3 unchanged sentences

Additional funds may not be available on a timely basis, on commercially acceptable terms, or at all, and such funds, if raised, may not be sufficient to enable the Company to continue to implement its long-term business strategy.

The Company's ability to raise additional capital may be adversely impacted by potentially worsening global economic conditions caused by a variety of factors including geopolitical tensions, rising interest rates, and inflationary pressures.

If the Company is unable to raise sufficient additional capital or generate revenue from transactions with potential third-party partners for the development and/or commercialization of its drug candidates, it may need to substantially curtail planned operations.

5 unchanged sentences

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of March 31, 2024, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024 and 2023, the condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2024 and 2023, and the condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 27, 2024 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2024, the results of its operations and comprehensive loss for the three months ended March 31, 2024 and 2023, its changes in stockholders’ equity for the three months ended March 31, 2024 and 2023 and its cash flows for the three months ended March 31, 2024 and 2023.

The accompanying condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statement of stockholders’ equity for the three and six months ended June 30, 2024 and 2023, and the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 are unaudited.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 27, 2024 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2024, the results of its operations and comprehensive loss for the three and six months ended June 30, 2024 and 2023, its changes in stockholders’ equity for the three and six months ended June 30, 2024 and 2023 and its cash flows for the six months ended June 30, 2024 and 2023.

The condensed consolidated balance sheet data as of December 31, 2023 was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles in the United States (“GAAP”).

The financial data and other information disclosed in these notes related to the three months ended March 31, 2024 and 2023 are unaudited.

The results for the three months ended March 31, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period.

The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2024 and 2023 are unaudited.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period.

The unaudited interim financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the SEC.

5 unchanged sentences

All intercompany transactions have been eliminated.

Based upon the Company’s revenue, the Company believes that gross profit does not provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the condensed consolidated statement of operations.

Based upon the nature and size of the Company’s revenue, the Company believes that gross profit does not provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the condensed consolidated statement of operations.

Use of Estimates

10 unchanged sentences

Contingent Consideration

The Company records a contingent consideration liability related to future potential payments resulting from the acquisition of Confluence based upon significant unobservable inputs including the achievement of regulatory and commercial milestones, as well as estimated future sales levels and the discount rates applied to calculate the present value of the potential payments.

The Company records a contingent consideration liability related to future potential payments resulting from the acquisition of Confluence Life Sciences, Inc.

(now known as Aclaris Life Sciences, Inc.) (“Confluence”) based upon significant unobservable inputs including the achievement of regulatory and commercial milestones, as well as estimated future sales levels and the discount rates applied to calculate the present value of the potential payments.

Significant judgement is involved in determining the appropriateness of these assumptions.

4 unchanged sentences

Significant assumptions used in the Company’s estimates include the probability of achieving regulatory milestones and commencing commercialization, which are based on an asset’s current stage of development and a review of existing clinical data.

Probability of success assumptions ranged between 17 % and 40 % at March 31, 2024.

Probability of success assumptions ranged between 17 % and 40 % at June 30, 2024.

Additionally, estimated future sales levels and the risk-adjusted discount rate applied to the potential payments are also significant assumptions used in calculating the fair value.

20 unchanged sentences

Discontinued Operations

As of March 31, 2024 and December 31, 2023, the Company had $ 2.2 million in discontinued operations reported as other current liabilities in the Company’s consolidated balance sheet, related to discontinued commercial products.

As of June 30, 2024 and December 31, 2023, the Company had $ 2.2 million in discontinued operations reported as other current liabilities in the Company’s consolidated balance sheet, related to discontinued commercial products.

Recently Issued Accounting Pronouncements

11 unchanged sentences

The following tables present information about the fair value measurements of the Company’s financial assets and liabilities which are measured at fair value on a recurring and non-recurring basis, and indicate the level of the fair value hierarchy utilized to determine such fair values:

March 31, 2024

June 30, 2024

(In thousands)

9 unchanged sentences

Total liabilities

As of March 31, 2024 and December 31, 2023, the Company’s cash equivalents consisted of money market funds, which were valued based upon Level 1 inputs.

The Company’s marketable securities as of March 31, 2024 and December 31, 2023 consisted of commercial paper and corporate debt, asset-backed debt, foreign government agency debt and U.S.

As of June 30, 2024 and December 31, 2023, the Company’s cash equivalents consisted of money market funds, which were valued based upon Level 1 inputs.

The Company’s marketable securities as of June 30, 2024 consisted of corporate debt, asset-backed debt, foreign government agency debt, and U.S.

government and government agency debt securities, which were all valued based upon Level 2 inputs.

The Company’s marketable securities as of December 31, 2023 consisted of commercial paper and corporate debt, asset-backed debt, foreign government agency debt, and U.S.

government and government agency debt securities, which were all valued based upon Level 2 inputs.

In determining the fair value of its Level 2 investments, the Company relies on quoted prices for identical securities in markets that are not active.

These quoted prices are obtained by the Company with the assistance of a third-party pricing service based on available trade, bid and other observable market data for identical securities.

During the three months ended March 31, 2024 and 2023, there were no transfers into or out of Level 3.

The overall $ 2.8 million increase in the fair value of the contingent consideration liability during the three months ended March 31, 2024 was primarily due to changes in estimated sales levels and changes to the probability of success for certain drug candidates.

As of March 31, 2024 and December 31, 2023, the fair value of the Company’s available-for-sale marketable securities by type of security was as follows:

March 31, 2024

During the three and six months ended June 30, 2024 and 2023, there were no transfers into or out of Level 3.

The overall $ 3.0 million increase in the fair value of the contingent consideration liability during the six months ended June 30, 2024 was primarily due to changes in estimated sales levels and changes to the probability of success for certain drug candidates.

As of June 30, 2024 and December 31, 2023, the fair value of the Company’s available-for-sale marketable securities by type of security was as follows:

June 30, 2024

(In thousands)

1 unchanged sentence

Corporate debt securities (1)

Commercial paper

Asset-backed debt securities (2)

4 unchanged sentences

(2) Included in Asset-backed debt securities is $ 0.1 million with maturity dates between one and two years .

(3) Included in Foreign government agency debt securities is $ 4.8 million with a maturity date between one and two years .

(3) Included in U.S.

24 unchanged sentences

Property and equipment, net

Depreciation expense was $ 0.2 million for each of the three months ended March 31, 2024 and 2023.

Depreciation expense was $ 0.2 million for each of the three months ended June 30, 2024 and 2023, and $ 0.4 million for each of the six months ended June 30, 2024 and 2023.

Accrued Expenses

9 unchanged sentences

Preferred Stock

As of March 31, 2024 and December 31, 2023, the Company’s amended and restated certificate of incorporation (the “Charter”) authorized the Company to issue 10,000,000 shares of undesignated preferred stock.

There were no shares of preferred stock outstanding as of March 31, 2024 or December 31, 2023.

As of March 31, 2024 and December 31, 2023, the Company’s Charter authorized the Company to issue 200,000,000 shares of $ 0.00001 par value common stock.

There were 71,248,017 and 70,894,889 shares of common stock issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company’s amended and restated certificate of incorporation (the “Charter”) authorized the Company to issue 10,000,000 shares of undesignated preferred stock.

There were no shares of preferred stock outstanding as of June 30, 2024 or December 31, 2023.

As of June 30, 2024 and December 31, 2023, the Company’s Charter authorized the Company to issue 200,000,000 shares of $ 0.00001 par value common stock.

There were 71,332,825 and 70,894,889 shares of common stock issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to any preferential dividend rights of any series of preferred stock that may be outstanding.

No dividends have been declared through March 31, 2024.

No dividends have been declared through June 30, 2024.

Sales of Common Stock Pursuant to At-The-Market Facility

In April 2023, the Company sold 3.4 million shares of its common stock for aggregate gross proceeds of $ 27.5 million, pursuant to a sales agreement with SVB Securities LLC and Cantor Fitzgerald & Co., as sales agents, dated February 23, 2023.

The Company paid selling commissions of $ 0.8 million in connection with the sale.

Stock-Based Awards

8 unchanged sentences

As of January 1, 2024, the number of shares of common stock that may be issued under the 2015 Plan was automatically increased by 2,835,795 shares.

As of March 31, 2024, 4,020,777 shares remained available for grant under the 2015 Plan.

The Company had 6,233,088 stock options and 3,139,539 RSUs outstanding as of March 31, 2024 under the 2015 Plan.

As of June 30, 2024, 4,351,008 shares remained available for grant under the 2015 Plan.

The Company had 5,867,413 stock options and 3,110,751 RSUs outstanding as of June 30, 2024 under the 2015 Plan.

2017 Inducement Plan

1 unchanged sentence

The 2017 Inducement Plan is a non-stockholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules.

The Company had 353,100 stock options outstanding as of March 31, 2024 under the 2017 Inducement Plan.

The Company had 333,000 stock options outstanding as of June 30, 2024 under the 2017 Inducement Plan.

All shares of common stock that were eligible for issuance under the 2017 Inducement Plan after October 1, 2018, including any shares underlying any awards that expire or are otherwise terminated, reacquired to satisfy tax withholding obligations, settled in cash or repurchased by the Company in the future that would have been eligible for re-issuance under the 2017 Inducement Plan, were retired.

2 unchanged sentences

Upon the 2015 Plan becoming effective, no further grants can be made under the 2012 Plan.

The Company had 380,792 stock options outstanding as of March 31, 2024 under the 2012 Plan.

The Company had 380,792 stock options outstanding as of June 30, 2024 under the 2012 Plan.

Stock Option Valuation

The weighted average assumptions the Company used to estimate the fair value of stock options granted during the three months ended March 31, 2024 and 2023 were as follows:

Three Months Ended

The weighted average assumptions the Company used to estimate the fair value of stock options granted during the six months ended June 30, 2024 and 2023 were as follows:

Six Months Ended

Risk-free interest rate

5 unchanged sentences

Stock Options

The following table summarizes stock option activity for the three months ended March 31, 2024:

The following table summarizes stock option activity for the six months ended June 30, 2024:

(In thousands, except share and per share data and years)

2 unchanged sentences

( 1,820,950 )

Outstanding as of March 31, 2024

Options vested and expected to vest as of March 31, 2024

Options exercisable as of March 31, 2024

The weighted average grant date fair value of stock options granted during the three months ended March 31, 2024 was $ 0.86 per share.

Outstanding as of June 30, 2024

Options vested and expected to vest as of June 30, 2024

Options exercisable as of June 30, 2024

The weighted average grant date fair value of stock options granted during the six months ended June 30, 2024 was $ 0.86 per share.

Restricted Stock Units

The following table summarizes RSU activity for the three months ended March 31, 2024:

The following table summarizes RSU activity for the six months ended June 30, 2024:

(In thousands, except share and per share data)

1 unchanged sentence

Forfeited and cancelled

Outstanding as of March 31, 2024

Outstanding as of June 30, 2024

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

(In thousands)

3 unchanged sentences

Total stock-based compensation expense

As of March 31, 2024, the Company had unrecognized stock-based compensation expense for stock options and RSUs of $ 16.6 million and $ 13.6 million, respectively, which is expected to be recognized over weighted average periods of 2.5 years and 2.3 years, respectively.

As of June 30, 2024, the Company had unrecognized stock-based compensation expense for stock options and RSUs of $ 13.2 million and $ 11.0 million, respectively, which is expected to be recognized over weighted average periods of 2.3 years and 2.0 years, respectively.

Net Loss per Share

1 unchanged sentence

Three Months Ended

Six Months Ended

(In thousands, except for share and per share data)

3 unchanged sentences

Therefore, the weighted average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share is the same.

The following table presents potential shares of common stock excluded from the calculation of diluted net loss per share for the three months ended March 31, 2024 and 2023.

All share amounts presented in the table below represent the total number outstanding as of March 31, 2024 and 2023.

The following table presents potential shares of common stock excluded from the calculation of diluted net loss per share for the six months ended June 30, 2024 and 2023.

All share amounts presented in the table below represent the total number outstanding as of June 30, 2024 and 2023.

Options to purchase common stock

9 unchanged sentences

The lease commenced in June 2019 and has a term that runs through June 2029.

In January 2023, the Company amended the sublease agreement to add an additional 6,261 square feet of office and laboratory space effective February 2023, which term runs concurrently with the existing term.

In January 2023, the Company amended the sublease agreement to add an additional 6,261 square feet of office and laboratory space effective February 2023.

The Company exercised its option to terminate the leasing of the additional space effective as of June 30, 2024.

Supplemental balance sheet information related to operating leases is as follows:

5 unchanged sentences

Total operating lease liabilities

Amortization expense related to operating lease right-of-use assets and accretion of operating lease liabilities totaled $ 0.1 million and $ 0.3 million for the three months ended March 31, 2024 and 2023, respectively.

Amortization expense related to operating lease right-of-use assets and accretion of operating lease liabilities totaled $ 0.1 million and $ 0.2 million for the three months ended June 30, 2024 and 2023, respectively, and $ 0.3 million and $ 0.4 million for the six months ended June 30, 2024 and 2023, respectively.

Agreements Related to Intellectual Property

16 unchanged sentences

The patents and patent applications relate to the use of baricitinib, Lilly’s JAK inhibitor, to treat alopecia areata.

Under the license agreement, Lilly has paid the Company an upfront payment, and regulatory and certain commercial milestone payments, and has agreed to pay the Company anniversary payments and other commercial milestone payments upon the achievement of specified milestones as set forth in the agreement, and a low single-digit royalty calculated as a percentage of Lilly’s net sales of baricitinib for the treatment of alopecia areata.

Under the license agreement, Lilly has paid the Company an upfront payment, and regulatory and certain commercial milestone payments, and agreed to pay the Company anniversary payments and other commercial milestone payments upon the achievement of specified milestones as set forth in the agreement, and a low single-digit royalty calculated as a percentage of Lilly’s net sales of baricitinib for the treatment of alopecia areata.

The Company has separate contractual obligations under which the Company has agreed to pay to third parties an amount equal to any regulatory and commercial milestone payments it receives under the Lilly license agreement, as well as a portion of the upfront consideration and a portion of the royalties it may receive under the license agreement.

During the three months ended March 31, 2024 and 2023, the Company recorded licensing revenue under this agreement of $ 1.7 million and $ 1.6 million, respectively, from Lilly, a portion of which was payable to third parties.

In July 2024, the Company entered into a royalty purchase agreement pursuant to which the Company sold a portion of the Company’s future royalty payments and the remaining anniversary milestones associated with the license to Lilly (see Note 14).

The Company recorded licensing revenue under this agreement of $ 2.1 million and $ 0.9 million during the three months ended June 30, 2024 and 2023, respectively, and $ 3.9 million and $ 2.3 million during the six months ended June 30, 2024 and 2023, respectively, from Lilly, a portion of which was payable to third parties.

Asset Purchase Agreement – EPI Health, LLC

3 unchanged sentences

The sale was approved by the bankruptcy court in September 2023.

As a result of the bankruptcy proceedings, all amounts that are due and outstanding by EPI Health have been fully reserved for as of March 31, 2024.

As a result of the bankruptcy proceedings, all amounts that are due and outstanding by EPI Health have been fully reserved for as of June 30, 2024.

Agreement and Plan of Merger – Confluence

3 unchanged sentences

In addition to the payments described above, if the Company sells, licenses or transfers any of the intellectual property acquired from Confluence pursuant to the Confluence Agreement to a third party, the Company will be obligated to pay the former Confluence equity holders a portion of any consideration received from such sale, license or transfer in specified circumstances.

As of March 31, 2024 and December 31, 2023, the balance of the Company’s contingent consideration liability was $ 9.0 million and $ 6.2 million, respectively (see Note 3).

The Company did no t record a federal or state income tax benefit for losses incurred during the three months ended March 31, 2024 and 2023.

As of June 30, 2024 and December 31, 2023, the balance of the Company’s contingent consideration liability was $ 9.2 million and $ 6.2 million, respectively (see Note 3).

The Company did no t record a federal or state income tax benefit for losses incurred during the three and six months ended June 30, 2024 and 2023.

The Company concluded that it is more likely than not that its deferred tax assets will not be realized which resulted in recording a full valuation allowance during those periods.

Restructuring Charges

In December 2023, the Company’s board of directors approved a reduction of the Company’s workforce by approximately 46 %, which the Company expects to be substantially completed by June 2024.

In December 2023, the Company’s board of directors approved a reduction of the Company’s workforce by approximately 46 %, which was substantially completed as of June 30, 2024.

This action was taken in order to streamline operations, reduce costs and preserve capital.

2 unchanged sentences

The noticed employees are entitled to receive cash severance payments and other benefits, which are contingent upon providing additional services to the Company.

During the year ended December 31, 2023, the Company recorded a restructuring charge for the one-time termination benefit for impacted employees with retention periods less than the sixty-day minimum retention period, which was triggered immediately upon either terminating or giving notice to the impacted employees.

During the three months ended March 31, 2024, the Company recognized severance expense of $ 2.5 million and made cash payments of $ 3.0 million related to severance to terminated employees.

During the three and six months ended June 30, 2024, the Company recognized severance expense of $ 0.1 million and $ 2.6 million, respectively.

During the six months ended June 30, 2024, the Company made cash payments of $ 4.5 million related to severance to impacted employees.

Segment Information

6 unchanged sentences

The Company does not report balance sheet information by segment since it is not reviewed by the chief operating decision maker, and all of the Company’s tangible assets are held in the United States.

The Company’s results of operations by segment for the three months ended March 31, 2024 and 2023 are summarized in the tables below:

The Company’s results of operations by segment for the three and six months ended June 30, 2024 and 2023 are summarized in the tables below:

(In thousands)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Revenue from external customers

7 unchanged sentences

(In thousands)

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Revenue from external customers

5 unchanged sentences

Loss from operations

(In thousands)

Six Months Ended June 30, 2024

Revenue from external customers

Intercompany revenue

Cost of revenue

Research and development

General and administrative

Revaluation of contingent consideration

Restructuring expense

Loss from operations

(In thousands)

Six Months Ended June 30, 2023

Revenue from external customers

Intercompany revenue

Cost of revenue

Research and development

General and administrative

Revaluation of contingent consideration

Loss from operations

Subsequent Events

In July 2024, the Company entered into a royalty purchase agreement with OCM IP Healthcare Portfolio LP, an investment vehicle for Ontario Municipal Employees Retirement System (“OMERS”).

Under the royalty purchase agreement, the Company sold to OMERS a portion of the Company’s future royalty payments and the remaining anniversary milestones associated with the Company’s existing license to Lilly relating to OLUMIANT® (baricitinib) for the treatment of alopecia areata.

Under the terms of the royalty purchase agreement, the Company received an upfront payment of $ 26.5 million and is eligible to receive up to an additional $ 5.0 million based on the achievement of certain sales milestones for OLUMIANT in 2024.

In exchange, OMERS acquired a portion of the royalty payable by Lilly to the Company for worldwide net sales of OLUMIANT for the treatment of alopecia areata from April 1, 2024 through the remainder of the

royalty term under the Company's license agreement with Lilly, and 100 % of the remaining anniversary milestone payments payable by Lilly to the Company under the license agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements