What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-12 compared with 2024-05-13 · 103 added, 61 removed, 147 unchanged (53% of the section changed)

16 unchanged sentences

• Guillain-Barré Syndrome, or GBS:

We are advancing our lead candidate, ANX005, an investigational, full-length monoclonal antibody, or mAb, formulated for intravenous administration in a pivotal Phase 3 clinical trial for the potential treatment of patients with GBS.

GBS is a rare antibody-mediated autoimmune disease that is the most common cause of acute neuromuscular paralysis, with no therapies in the U.S.

approved by the Food and Drug Administration, or FDA.

We believe maximum suppression of C1q and the classical cascade early in the disease process may act to rapidly prevent complement-mediated nerve damage and irreversible neurological disability.

In a prior placebo-controlled proof-of-concept trial, a single dose of ANX005 showed rapid and consistent improvement in muscle strength that translated into observable gains in health status, including a reduction in the need of mechanical ventilation, as well as a reduction in nerve damage and clinical function.

We completed enrollment of 241 patients in our ongoing placebo-controlled Phase 3 GBS trial, and data are anticipated in the second quarter of 2024.

We are advancing our lead candidate, ANX005, an investigational, full-length monoclonal antibody, or mAb, formulated for intravenous administration for the potential treatment of patients with GBS, a rare antibody-mediated autoimmune disease that is the most common cause of acute neuromuscular paralysis with no approved therapies in the U.S.

In the second quarter of 2024, we announced positive results from the completed pivotal Phase 3 trial in GBS at the 2024 Peripheral Nerve Society (PNS) Annual Meeting.

Data showed that ANX005-treated patients demonstrated faster and more complete recovery from week 1 through week 26 on primary and multiple pre-specified endpoints.

Early, robust and durable treatment effects expedited recovery and led to patients walking and off ventilation approximately one month earlier.

A single infusion of ANX005 was generally well-tolerated with a safety profile similar to placebo and adverse events balanced across groups.

We intend to establish comparability of the GBS patient population in our Phase 3 trial with patients from the International Guillain-Barré Syndrome Outcomes Study, or IGOS, a global, prospective, observational, multicenter cohort study that has enrolled 2,000 patients who were followed for one to three years.

We have initiated a real-world evidence, or RWE, comparability protocol with IGOS with data anticipated in the first half of 2025 to support our Biologics License Applications, or BLA, submission.

We have initiated a real-world evidence, or RWE, comparability protocol with IGOS with initial topline data anticipated by year-end 2024 to support our planned Biologics License Applications, or BLA, submission in the first half of 2025.

ANX005 has been granted Fast Track and orphan drug designation for the treatment of GBS from the FDA.

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• Geographic Atrophy, or GA:

We are advancing ANX007, an antigen-binding fragment, or Fab , formulated for intravitreal administration, into a pivotal Phase 3 program for the potential treatment of patients with GA.

GA is the leading cause of vision loss in the elderly, that affects an estimated eight million people globally.

ANX007 is designed to block C1q locally in the eye, to provide more complete protection against excess classical complement activity, a key driver of GA, and the

loss of photoreceptor neurons.

In a randomized, multi-center, double-masked, sham-controlled Phase 2 ARCHER clinical trial of 270 patients with GA, ANX007 was the first and only program to show statistically significant and consistent protection against vision loss in a broad population of patients with GA, measured by best corrected visual acuity, or BCVA, ≥15-letter loss, the widely accepted and clinically meaningful functional endpoint.

Significant protection from vision loss was also shown in multiple additional prespecified measures of BCVA and visual function, including low luminance visual acuity (LLVA) and low luminance visual deficit (LLVD).

ANX007’s treatment effect increased over the course of the on-treatment portion of the study, suggesting that ANX007 may provide a growing and durable treatment effect over time.

While benefit gained against vision lost was maintained during the subsequent six-month off-treatment period, the rate of decline for BCVA ≥ 15-letter vision began to parallel that of sham, providing additional support for the observed on-treatment protection.

ANX007 was also shown to protect key retinal structures important for vision, including significant protection from photoreceptor loss, supported by slowing of loss of foveal retinal pigment epithelium (RPE).

ANX007 was generally well-tolerated through month 12, with no increase in choroidal neovascularization (CNV) rates between the treated and sham arms and no events of retinal vasculitis reported.

In December 2023, we announced FDA alignment on a Phase 3 registrational program for ANX007 in GA using, for the first-time, the prevention of ≥15-letter loss of BCVA as the primary outcome measure.

We plan to initiate the Phase 3 ARCHER II trial in mid-2024, a global sham-controlled trial designed to confirm the results from the Phase 2 ARCHER trial.

We also plan to initiate the Phase 3 ARROW trial in late 2024, an injection-controlled head-to-head study against SYFOVRE® (pegcetacoplan injection) with the potential to underscore ANX007’s unique mechanism of action and critical differentiation on visual function .

We are advancing ANX007, an antigen-binding fragment, or Fab , formulated for intravitreal administration for the potential treatment of patients with GA, the leading cause of blindness in the elderly, that affects an estimated eight million people globally.

In the Phase 2 ARCHER trial, ANX007 was shown to preserve vision on multiple measures and provided significant structural protection within the retina, particularly of photoreceptors in the central fovea that are important to visual acuity.

ANX007 was generally well-tolerated through month 12, with no increase in choroidal

neovascularization (CNV) rates between the treated and sham arms and no events of retinal vasculitis reported.

In August 2024, we announced that patient dosing was initiated in the global pivotal Phase 3 ARCHER II trial, the only GA pivotal program utilizing visual protection as the global regulatory-aligned primary end point.

Topline data from the ARCHER II trial are expected in the second half of 2026.

Plans for a Phase 3 injection-controlled study, ARROW, to assess the prevention of ≥15-letter loss of BCVA, are also ongoing.

ANX007 has been granted Fast Track designation from the FDA and is the first therapeutic candidate for the treatment of GA to receive Priority Medicine, or PRIME, designation by the EMA, which provides early and proactive support to developers of promising medicines that may offer a major therapeutic advantage over existing treatments or benefit to patients without treatment options.

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We are advancing ANX1502, a novel oral small molecule inhibitor of classical complement which we believe is first-in-kind.

In a Phase 1 single-ascending dose, or SAD, and multiple-ascending dose, or MAD, clinical trial in healthy volunteers designed to evaluate the safety, tolerability, pharmacokinetics, or PK, and pharmacodynamics, or PD, ANX1502 was generally well tolerated across cohorts with no serious adverse events, achieved target levels of active drug and showed supportive impact on a PD biomarker of complement activity that support its advancement.

We plan to advance a tablet formation of ANX1502 into a proof-of-concept study designed to assess PD and efficacy in patients with cold agglutinin disease, or CAD, in the first half of 2024, with data expected in the second half of 2024.

Following the successful completion of the proof-of-concept study, we intend to evaluate ANX1502 in additional serious complement-mediated autoimmune diseases with the aim of providing enhanced efficacy and offering convenient dosing administration for long-term treatment of chronic conditions.

In a Phase 1 single-ascending dose, or SAD, and multiple-ascending dose, or MAD, clinical trial in healthy volunteers, ANX1502 was generally well tolerated with no serious adverse events, achieved target levels of active drug and showed supportive impact on a pharmacodynamic (PD) biomarker of complement activity.

We have completed a bridging study from liquid to a tablet formulation of ANX1502 and are on track to advance a proof-of-concept study designed to assess PD in patients with cold agglutinin disease, or CAD, with data expected in the fourth quarter of 2024.

We were incorporated in March 2011 and commenced operations later that year.

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We have incurred net losses each year since our inception.

Our net losses were $25.2 million and $38.7 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, we had an accumulated deficit of $597.7 million and cash and cash equivalents and short-term investments of $264.9 million.

Our net losses were $29.6 million and $35.2 million for the three months ended June 30, 2024 and 2023, respectively, and $54.8 million and $73.9 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, we had an accumulated deficit of $627.3 million and cash and cash equivalents and short-term investments of $368.7 million.

Components of Operating Results

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The prepaid amounts are then expensed as the related services are performed.

At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates.

At this time, we cannot

reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates.

We expect our future research and development expenses to vary substantially for the foreseeable future as we continue to prioritize our pipeline opportunities, advance our product candidates through clinical trials, invest in next generation development, pursue regulatory approval of our product candidates, and hire additional personnel to support our research and development efforts.

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Results of Operations

Comparison of the Three Months Ended March 31, 2024 and 2023

Comparison of the Three Months Ended June 30, 2024 and 2023

The following tables summarize our results of operations for the periods presented:

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Total research and development expenses

Research and development expenses decreased by $11.4 million, or 35%, for the three months ended March 31, 2024 compared to the same period in 2023.

The decrease was primarily due to a decrease of $6.5 million in contract manufacturing expenses related to ANX005 clinical supply, a decrease of $4.5 million in direct clinical outside services costs due to completion of the Phase 2 ARCHER trial in GA in 2023, and a decrease of $0.8 million in compensation and personnel-related expenses due to a decrease in headcount, partially offset by an increase of $0.4 million in facilities and depreciation due to facilities allocation and no sublease income as the sublease agreement expired in November 2023.

Research and development expenses decreased by $5.2 million, or 17%, for the three months ended June 30, 2024 compared to the same period in 2023.

The decrease was primarily due to a decrease of $4.0 million in direct clinical and nonclinical outside services costs due to completion of the Phase 2 ARCHER trial in GA in 2023, a decrease of $2.3 million in contract manufacturing expenses for ANX005, a decrease of $0.4 million in laboratory supplies and materials, and a decrease of $0.2 million in compensation and personnel-related expenses due to a decrease in headcount, partially offset by an increase of $1.3 million in consulting and professional services, and an increase of $0.5 million in facilities related costs due to completion of sublease agreement.

General and Administrative Expenses

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Total general and administrative expenses

General and administrative expenses decreased by $1.3 million, or 14%, for the three months ended March 31, 2024 compared to the same period in 2023.

The decrease was primarily due to a reduction of $1.0 million in consulting and professional services costs for accounting, legal fees, and other consulting fees.

Compensation and personnel-related expenses decreased by $0.4 million due to a decrease in headcount.

General and administrative expenses increased by $1.1 million, or 15%, for the three months ended June 30, 2024 compared to the same period in 2023.

The increase was primarily due to an increase of $0.7 million in consulting and professional services costs for business development and market research, and an increase of $0.2 million in facilities related costs.

Interest and other income, net

Interest and other income, net, increased by $0.8 million, or 32%, for the three months ended March 31, 2024 compared to the same period in 2023.

The increase was primarily due to favorable interest rates.

Interest and other income, net, increased by $1.5 million, or 59%, for the three months ended June 30, 2024 compared to the same period in 2023.

The increase was primarily due to higher average cash balance and favorable interest rates.

Comparison of the Six Months Ended June 30, 2024 and 2023

The following tables summarize our results of operations for the periods presented:

Six Months Ended

(in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Interest and other income, net

Research and Development Expenses

Six Months Ended

(in thousands)

Direct costs:

Clinical and nonclinical outside services

Consulting and professional services

Contract manufacturing

Laboratory supplies and materials

Indirect costs:

Compensation and personnel-related

(including stock-based compensation)

Facilities and depreciation

Total research and development expenses

Research and development expenses decreased by $16.6 million, or 27%, for the six months ended June 30, 2024 compared to the same period in 2023.

The decrease was primarily due to a decrease of $8.8 million in contract manufacturing expenses for ANX005, a decrease of $8.5 million in direct clinical and nonclinical outside services costs due to completion of the Phase 2 ARCHER trial in GA in 2023, a decrease of $1.0 million in compensation and personnel-related expenses due to a decrease in headcount, and a decrease in $0.7 million of laboratory supplies and materials, partially offset by an increase of $1.4 million in consulting and professional services, and an increase of $1.0 million in facilities related costs due to completion of sublease agreement.

General and Administrative Expenses

Six Months Ended

(in thousands)

Compensation and personnel-related

(including stock-based compensation)

Consulting and professional services

Facilities and depreciation

Total general and administrative expenses

General and administrative expenses decreased by $0.2 million, or 1%, for the six months ended June 30, 2024 compared to the same period in 2023.

The decrease was primarily due to a decrease of compensation and personnel-related expenses of $0.4 million due

to a decrease in headcount, and a decrease of $0.3 million in consulting and professional services costs, partially offset by an increase in $0.4 million in facilities related costs due to completion of sublease agreement.

Interest and other income, net

Interest and other income, net, increased by $2.3 million, or 45%, for the six months ended June 30, 2024 compared to the same period in 2023.

The increase was primarily due to higher average cash balance and favorable interest rates.

Liquidity and Capital Resources

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We have funded our operations primarily through the sale of equity securities.

As of March 31, 2024, we had available cash and cash equivalents and short-term investments of $264.9 million and an accumulated deficit of $597.7 million.

As of June 30, 2024, we had available cash and cash equivalents and short-term investments of $368.7 million and an accumulated deficit of $627.3 million.

Historical Cash Flows

Three Months Ended

Six Months Ended

(in thousands)

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Net cash provided by financing activities

(Decrease) increase in cash, cash equivalents and restricted cash

Decrease in cash, cash equivalents and restricted cash

Cash Flows from Operating Activities

Cash used in operating activities for the three months ended March 31, 2024 was $28.3 million, which consisted of a net loss of $25.2 million and a net change of $7.5 million in our operating assets and liabilities, partially offset by $4.4 million in non-cash charges.

Cash used in operating activities for the six months ended June 30, 2024 was $50.0 million, which consisted of a net loss of $54.8 million and a net change of $3.6 million in our operating assets and liabilities, partially offset by $8.4 million in non-cash charges.

The non-cash charges consisted of stock-based compensation of $9.6 million, depreciation and amortization of $1.1 million, reduction in the carrying amount of right-of-use assets of $0.6 million, partially offset by accretion of discount on available-for-sale securities of $2.9 million.

Cash used in operating activities for the three months ended March 31, 2023 was $33.0 million, which consisted of a net loss of $38.7 million, partially offset by $4.5 million in non-cash charges and a net change of $1.0 million in our operating assets and liabilities.

The non-cash charges consisted of stock-based compensation of $4.6 million, depreciation and amortization of $0.5 million, and reduction in the carrying amount of right-of-use assets of $0.3 million, partially offset by accretion of discount on available-for-sale securities of $0.9 million.

Cash used in operating activities for the six months ended June 30, 2023 was $69.4 million, which consisted of a net loss of $73.9 million and a net change of $4.7 million in our operating assets and liabilities, partially offset by $9.2 million in non-cash charges.

The non-cash charges consisted of stock-based compensation of $9.3 million, depreciation and amortization of $1.1 million, reduction in the carrying amount of right-of-use assets of $0.5 million, partially offset by accretion of discount on available-for-sale securities of $1.7 million.

Cash Flows from Investing Activities

Cash used in investing activities for the three months ended March 31, 2024 was $77.3 million, which consisted of $100.3 million of purchases of available-for-sale securities, partially offset by $23.0 million of proceeds from maturities of available-for-sale securities.

Cash provided by investing activities for the three months ended March 31, 2023 was $19.5 million, which consisted of $51.1 million of proceeds from maturities of available-for-sale securities, partially offset by $31.4 million of purchases of available-for-sale securities and $0.1 million of equipment purchases.

Cash used in investing activities for the six months ended June 30, 2024 was $173.9 million, which consisted of $266.2 million of purchases of available-for-sale securities, partially offset by $92.3 million of proceeds from maturities of available-for-sale securities.

Cash provided by investing activities for the six months ended June 30, 2023 was $25.0 million, which consisted of $95.1 million of proceeds from maturities of available-for-sale securities, partially offset by $69.9 million of purchases of available-for-sale securities and $0.2 million of equipment purchases.

Cash Flows from Financing Activities

Cash provided by financing activities for the three months ended March 31, 2024 was $32.4 million, which consisted of $32.2 million of net proceeds from the issuance of common stock under our 2021 ATM program and $0.2 million of proceeds from the exercise of common stock options.

Cash provided by financing activities for the three months ended March 31, 2023 was $17.6 million, which consisted of $17.5 million of net proceeds from the issuance of common stock to a related party under our 2021 ATM program and $0.1 million of proceeds from the exercise of common stock options.

Cash provided by financing activities for the six months ended June 30, 2024 was $156.1 million, which consisted of $116.8 million of net proceeds from the issuance of common stock and pre-funded warrants under our 2024 financing, $38.4 million of net proceeds from the issuance of common stock under our 2021 ATM program and $0.6 million of proceeds from the exercise of common stock options and employee stock purchase plan purchases.

Cash provided by financing activities for the six months ended June 30, 2023 was $17.9 million, which consisted of $17.5 million of net proceeds from the issuance of common stock to a related party under our at-the-market offering program and $0.4 million of proceeds from the exercise of common stock options and employee stock purchase plan purchases.

Funding Requirements

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• the timing, receipt and amount of sales of any future approved products.

Based upon our current operating plan, we believe that our existing cash and cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements into mid-2026.

We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations.

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2024 Financing

In June 2024, we raised net proceeds of approximately $116.8 million after deducting underwriting discounts and offering expenses through the sale of 13,001,120 shares of our common stock, par value $0.001 per share at a price of $6.25 per share and pre-funded warrants to purchase an aggregate of 7,000,000 shares of common stock at a price of $6.249 per share, which equals the per share offering price for the shares of common stock less the $0.001 exercise price for each pre-funded warrant.

2023 Financing

In December 2023, we raised net proceeds of approximately $117.0 million after deducting underwriting discounts and offering expenses through the sale of 25,035,000 shares of our common stock, par value $0.001 per share at a price of $2.880 per share and pre-funded warrants to purchase an aggregate of 18,379,861 shares of common stock at a price of $2.879 per share, which equals the per share offering price for the shares of common stock less the $0.001 exercise price for each pre-funded warrant.

In February 2024, we issued an aggregate of 5,243,400 shares of common stock upon the cashless exercise of pre-funded warrants to purchase 5,244,444 shares of common stock.

In April 2024, we issued an aggregate of 965,427 shares of common stock upon the exercise of pre-funded warrants.

As of March 31, 2024, and as of the date of issuance of our interim condensed financial statements, pre-funded warrants to purchase up to 13,135,417 shares and 12,169,990 shares of common stock remained outstanding from the 2023 financing, respectively.

We issued an aggregate of 5,243,400 and 965,427 shares of common stock upon cashless and cash exercise of these pre-funded warrants in February 2024 and April 2024, respectively.

2022 Financing

In July 2022, we raised net proceeds of approximately $122.5 million after deducting fees and expenses through the sale of an aggregate of 9,013,834 shares of common stock, pre-funded warrants to purchase up to 24,696,206 shares of our common stock and accompanying common warrants to purchase up to 8,427,508 shares of our common stock.

The offering price per share and accompanying common warrant was $3.87125 per share and the offering price per pre-funded warrant and accompanying common

warrant was $3.87025 per share, which equals the per share offering price for the shares of common stock less the $0.001 exercise price for each such pre-funded warrant.

The offering price per share and accompanying common warrant was $3.87125 per share and the offering price per pre-funded warrant and accompanying common warrant was $3.87025 per share, which equals the per share offering price for the shares of common stock less the $0.001 exercise price for each such pre-funded warrant.

The pre-funded warrants remain exercisable until exercised in full.

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Both the pre-funded and common warrants are immediately exercisable, subject to beneficial ownership limitations.

In 2023, we issued an aggregate of 2,582,557 shares of common stock upon the cashless exercise of pre-funded warrants to purchase 2,583,144 shares of common stock.

As of March 31, 2024, pre-funded warrants to purchase up to 22,113,062 shares of common stock and common warrants to purchase up to 8,427,508 shares of common stock remained outstanding from the 2022 financing.

2021 At-the-Market (ATM) Program

In August 2021, we entered into a sales agreement with Cowen and Company LLC, or TD Cowen, as sales agent, pursuant to which we may issue and sell shares of our common stock for an aggregate maximum offering of $100.0 million under an at-the-market offering program, or 2021 ATM program.

TD Cowen is entitled to compensation up to 3% of the aggregate gross proceeds for the common stock sold through the 2021 ATM program.

During 2023, we sold 2,646,458 shares of common stock at a price of $6.80 per share under the 2021 ATM program for net proceeds of approximately $17.5 million after deducting commissions paid to TD Cowen.

During the three months ended March 31, 2024, we sold 6,639,348 shares of common stock under the 2021 ATM program for net proceeds of approximately $32.2 million.

As of March 31, 2024, approximately $48.9 million remained available for the offer and sale of shares of common stock under the 2021 ATM program.

Subsequent to March 31, 2024 and through the date of issuance of our interim condensed financial statements, net proceeds of approximately $6.4 million were raised as a result of the sale of shares of our common stock through the 2021 ATM program.

We issued an aggregate of 2,582,557 shares of common stock upon the cashless exercise of the pre-funded warrants in March 2023.

We issued an aggregate of 19,901 shares of common stock upon the cashless exercise of the common warrants in June 2024.

Pre-Funded and Common Warrants

The following summarizes warrant activity during the six months ended June 30, 2024 and 2023:

Number of Common Warrants

Number of Pre-funded Warrants

Weighted-Average Exercise Price

Balances as of December 31, 2023

Balances as of June 30, 2024

Number of Common Warrants

Number of Pre-funded Warrants

Weighted-Average Exercise Price

Balances as of December 31, 2022

Balances as of June 30, 2023

2024 ATM Program

1 unchanged sentence

TD Cowen is entitled to compensation up to 3% of the aggregate gross proceeds for the common stock sold through the 2024 ATM program.

As of March 31, 2024, we have not made any sales under the 2024 ATM program.

As of June 30, 2024, we have not made any sales under the 2024 ATM program.

2021 At-the-Market (ATM) Program

TD Cowen is entitled to compensation up to 3% of the aggregate gross proceeds for the

common stock sold through the 2021 ATM program.

During the six months ended June 30, 2024 and 2023, we sold 7,576,067 shares and 2,646,458 shares of common stock, respectively, under the 2021 ATM program for net proceeds of approximately $38.4 million and $17.5 million, respectively, after deducting commissions paid to TD Cowen.

As of June 30, 2024 and December 31, 2023, approximately $42.3 million and $82.0 million, respectively, remained available for the offer and sale of shares of common stock under the 2021 ATM program.

The Form S-3 registration statement pursuant to which the 2021 ATM Program is registered will expire on August 15, 2024, and no shares of common stock may be sold under the 2021 ATM Program after that date.

Critical Accounting Policies and Estimates

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Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

During the quarter ended March 31, 2024, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

During the quarter ended June 30, 2024, there were no material changes to our critical accounting policies or in the methodology used for estimates from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements Not Yet Adopted

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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 2. Management’s Discussion and Analysis