What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-07 · 114 added, 75 removed, 401 unchanged (32% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets:

10 unchanged sentences

Accrued expenses

Deferred income

Other current liabilities

1 unchanged sentence

Other liabilities

Deferred income, net of current portion

Contingent consideration

2 unchanged sentences

Preferred stock, $ 0.00001 par value;

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

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

Common stock, $ 0.00001 par value;

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

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

71,417,513 and 70,894,889 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid‑in capital

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Accumulated deficit

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Contract research

7 unchanged sentences

Loss from operations

Other income, net

Other income:

Interest income

Non-cash royalty income

Total other income

Net loss per share, basic and diluted

1 unchanged sentence

Other comprehensive loss:

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

Total other comprehensive loss

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

Total other comprehensive gain (loss)

Comprehensive loss

15 unchanged sentences

Balance at June 30, 2024

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

Unrealized gain on marketable securities

Stock-based compensation expense

Balance at September 30, 2024

Comprehensive

10 unchanged sentences

Balance at June 30, 2023

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

Unrealized loss on marketable securities

Stock-based compensation expense

Balance at September 30, 2023

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

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities :

7 unchanged sentences

Accounts payable

Accrued expenses

Accrued expenses and other liabilities

Deferred income

Net cash used in operating activities

9 unchanged sentences

Net cash (used in) provided by financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

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

As of September 30, 2024, the Company had cash, cash equivalents and marketable securities of $ 173.4 million and an accumulated deficit of $ 806.3 million.

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

4 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, heightened 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 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 accompanying condensed consolidated balance sheet as of September 30, 2024, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024 and 2023, the condensed consolidated statement of stockholders’ equity for the three and nine months ended September 30, 2024 and 2023, and the condensed consolidated statements of cash flows for the nine months ended September 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 September 30, 2024, the results of its operations and comprehensive loss for the three and nine months ended September 30, 2024 and 2023, its changes in stockholders’ equity for the three and nine months ended September 30, 2024 and 2023 and its cash flows for the nine months ended September 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 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 financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2024 and 2023 are unaudited.

The results for the three and nine months ended September 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.

16 unchanged sentences

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2024.

There have been no changes to the Company’s significant accounting policies from those disclosed in the annual report.

There have been no changes to the Company’s existing significant accounting policies from those disclosed in the annual report.

Contingent Consideration

7 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 June 30, 2024.

Probability of success assumptions ranged between 17 % and 40 % at September 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.

13 unchanged sentences

Under ASC Topic 606, the Company elected to apply the “right to invoice” practical expedient when recognizing contract research revenue and as such, recognizes revenue in the amount which it has the right to invoice.

ASC Topic 606 also provides an optional exemption, which the Company has elected to apply, from disclosing remaining performance obligations when revenue is recognized from the satisfaction of the performance obligation in accordance with the “right to invoice” practical expedient.

ASC Topic 606 also provides an optional exemption, which the Company has elected to apply, from disclosing remaining performance obligations when revenue is

recognized from the satisfaction of the performance obligation in accordance with the “right to invoice” practical expedient.

Licensing Revenue

3 unchanged sentences

The Company recognizes revenue from commercial milestones and royalty payments as the sales occur.

Deferred Income Related to the Sale of Future Royalties

The Company amortizes its deferred income liability related to the sale of future OLUMIANT® (baricitinib) royalties under the units-of-revenue method by computing a ratio of the proceeds received to the total expected payments over the term of the royalty purchase agreement and then applying that ratio to the period’s estimated cash payment (see Note 11).

The amortization is based on the Company’s current estimate of future royalty payments.

Discontinued Operations

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.

As of September 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:

June 30, 2024

September 30, 2024

(In thousands)

9 unchanged sentences

Total liabilities

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.

As of September 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 September 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.

3 unchanged sentences

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 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

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

The overall $ 3.8 million increase in the fair value of the contingent consideration liability during the nine months ended September 30, 2024 was primarily due to changes in estimated sales levels, changes to the probability of success for certain drug candidates, and the passage of time.

As of September 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:

September 30, 2024

(In thousands)

6 unchanged sentences

(1) Included in Corporate debt securities is $ 40.5 million with maturity dates between one and two years .

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

(2) Included in U.S.

16 unchanged sentences

Property and equipment, net consisted of the following:

September 30,

(In thousands)

6 unchanged sentences

Property and equipment, net

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.

Depreciation expense was $ 0.2 million for each of the three months ended September 30, 2024 and 2023, and $ 0.6 million for each of the nine months ended September 30, 2024 and 2023.

Accrued Expenses

Accrued expenses consisted of the following:

September 30,

(In thousands)

7 unchanged sentences

Preferred Stock

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.

As of September 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 September 30, 2024 or December 31, 2023.

As of September 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 71,417,513 and 70,894,889 shares of common stock issued and outstanding as of September 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 June 30, 2024.

No dividends have been declared through September 30, 2024.

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

9 unchanged sentences

The number of shares of common stock that may be issued under the 2015 Plan will automatically increase on January 1 of each year ending on January 1, 2025, in an amount equal to the lesser of (i) 4.0 % of the shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or (ii) an amount determined by the Company’s board of directors.

The shares of common stock underlying any awards that expire, are otherwise terminated, settled in cash, or repurchased by the Company under the 2015 Plan and the 2012 Plan will be added back to the shares of common stock available for issuance under the 2015 Plan.

common stock available for issuance under the 2015 Plan.

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 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.

As of September 30, 2024, 4,440,792 shares remained available for grant under the 2015 Plan.

The Company had 5,778,988 stock options and 3,071,776 RSUs outstanding as of September 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 333,000 stock options outstanding as of June 30, 2024 under the 2017 Inducement Plan.

The Company had 329,000 stock options outstanding as of September 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 June 30, 2024 under the 2012 Plan.

The Company had 337,244 stock options outstanding as of September 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 six months ended June 30, 2024 and 2023 were as follows:

Six Months Ended

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

Nine Months Ended

September 30,

Risk-free interest rate

5 unchanged sentences

Stock Options

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

The following table summarizes stock option activity for the nine months ended September 30, 2024:

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

2 unchanged sentences

( 1,913,375 )

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.

Outstanding as of September 30, 2024

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

Options exercisable as of September 30, 2024

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

Restricted Stock Units

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

The following table summarizes RSU activity for the nine months ended September 30, 2024:

(In thousands, except share and per share data)

1 unchanged sentence

Forfeited and cancelled

Outstanding as of June 30, 2024

Outstanding as of September 30, 2024

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

3 unchanged sentences

Total stock-based compensation expense

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.

As of September 30, 2024, the Company had unrecognized stock-based compensation expense for stock options and RSUs of $ 11.5 million and $ 9.3 million, respectively, which is expected to be recognized over weighted average periods of 2.1 years and 1.9 years, respectively.

Net Loss per Share

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(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 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.

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

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

September 30,

Options to purchase common stock

8 unchanged sentences

Louis, Missouri.

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

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

1 unchanged sentence

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

September 30,

(In thousands)

4 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 $ 0.2 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.

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 September 30, 2024 and 2023, respectively, and $ 0.4 million and $ 0.7 million for the nine months ended September 30, 2024 and 2023, respectively.

Agreements Related to Intellectual Property

7 unchanged sentences

Upon execution of the agreement, the Company received an upfront payment of $ 15.0 million from Sun Pharma, a portion of which was payable to third parties.

We recognized $ 3.0 million of licensing revenue during each of the three and nine months ended September 30, 2024.

License Agreement – Pediatrix Therapeutics, Inc.

9 unchanged sentences

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.

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.

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”), pursuant to which the Company sold to OMERS a portion of the Company’s future royalty payments and the remaining anniversary milestones associated with the license to Lilly (see Note 11).

The Company recognized $ 0.7 million and $ 8.3 million of licensing revenue during the three months ended September 30, 2024 and 2023, respectively, and $ 4.6 million and $ 10.7 million during the nine months ended September 30, 2024 and 2023, respectively.

The Company recognized $ 0.9 million of non-cash royalty income during each of the three and nine months ended September 30, 2024.

Asset Purchase Agreement – EPI Health, LLC

1 unchanged sentence

In July 2023, EPI Health filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.

Through the bankruptcy process, EPI Health and its parent company, Novan, Inc., sold the RHOFADE assets to a third party, which excluded the Company’s asset purchase agreement with EPI Health and the outstanding amounts due.

Through the bankruptcy process, EPI Health and its parent company, Novan, Inc., sold the RHOFADE assets to a third party, which excluded the Company’s asset

purchase agreement with EPI Health and the outstanding amounts due.

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 June 30, 2024.

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

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 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.

As of September 30, 2024 and December 31, 2023, the balance of the Company’s contingent consideration liability was $ 10.0 million and $ 6.2 million, respectively (see Note 3).

Sale of Future Royalties

In July 2024, the Company entered into a royalty purchase agreement with 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 for these payments, 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.

The Company evaluated the arrangement and concluded that the proceeds from the sale of future royalties should be recorded as deferred income on the condensed consolidated balance sheet, as the criteria for debt classification were not met in accordance with ASC Topic 470.

In particular, the Company does not have significant continuing involvement in the generation of the cash flows due to OMERS and there are no guaranteed rates of return to OMERS .

The Company recognizes non-cash royalty income under the “units-of-revenue” method in the condensed consolidated statements of operations and comprehensive loss.

The Company initially recorded $ 0.7 million as a receivable for royalties earned in the second quarter of 2024 and recorded $ 25.8 million as deferred income related to the sale of future royalties.

For each of the three and nine months ended September 30, 2024, the Company recognized $ 0.9 million of non-cash royalty income.

As of September 30, 2024, the current and non-current portions of the remaining deferred income recognized under the units-of-revenue method were $ 3.8 million and $ 21.2 million, respectively.

The Company did no t record a federal or state income tax benefit for losses incurred during the three and nine months ended September 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.

5 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 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.

During the three and nine months ended September 30, 2024, the Company recognized severance expense of $ 26 thousand and $ 2.6 million, respectively.

During the nine months ended September 30, 2024, the Company made cash severance payments of $ 5.2 million 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 and six months ended June 30, 2024 and 2023 are summarized in the tables below:

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

(In thousands)

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Revenue from external customers

7 unchanged sentences

(In thousands)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Revenue from external customers

6 unchanged sentences

(In thousands)

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Revenue from external customers

7 unchanged sentences

(In thousands)

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Revenue from external customers

5 unchanged sentences

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”).

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