What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-08-05 compared with 2020-05-08 · 126 added, 64 removed, 125 unchanged (60% of the section changed)

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As further detailed below, those effects have been primarily limited to where and how our employees work in our labs and offices.

To date, our current and future planned trials have not been subject to significant impact.

To date, our current and future planned clinical trials and pre-clinical studies have not been subject to significant impact.

Business Highlights

During the first quarter of 2020, we continued to grow our business and advance our development pipeline of product candidates in both our HBV Cure and Microbiome programs.

Key highlights and accomplishments during the quarter and upcoming milestones include:

During the second quarter of 2020, we continued to grow our business and advance our development pipeline of product candidates in both our HBV Cure and Microbiome programs.

Key highlights and accomplishments during the quarter, as well as upcoming milestones and subsequent events include:

HBV Cure Program

ABI-H0731 (H0731), our lead core inhibitor product candidate in the HBV Cure program :

Continuation of our ongoing open-label extension study, ABI-H0731-211 (Study 211), with subjects reaching 12-18 months of treatment with H0731+nucleos(t)ide analog reverse transcriptase inhibitor (NrtI) therapy.

Determination of the stopping criteria by which we will begin transitioning patients off therapy in Study 211 after discussions regarding such criteria with our lead investigators and review and agreement with the U.S.

Food and Drug Administration (FDA).

When we make this transition later this year, we expect this will be the first clinical trial with a core inhibitor to stop therapy and monitor patients for sustained virologic response.

Submission of an End of Phase 2 meeting request and briefing document for review with the Chinese regulatory authority, which details the proposed registrational studies of H0731+NrtI for chronic suppressive therapy in China.

Upcoming reporting of additional data from our Phase 2 studies, ABI-H0731-201 (Study 201), and Study 211 at the European Association for the Study of the Liver’s (EASL) Digital International Liver Congress TM in an oral presentation and late-breaker poster presentation.

EASL’s 2020 meeting

had been scheduled to occur in April 2020, but it was rescheduled to August 27 to 29, 2020 as a digital meeting due to the COVID-19 pandemic.

Continuation of our ongoing open-label extension study, ABI-H0731-211 (Study 211), and transition of patients who achieve agreed-upon stopping criteria off therapy.

Study 211 is the first clinical trial with a core inhibitor to stop therapy and monitor for sustained virologic response in patients with chronic HBV infection.

Upcoming reporting of additional interim analyses from Study 211 at the European Association for the Study of the Liver’s (EASL) Digital International Liver Congress TM in an oral presentation (HBeAg negative patients) and late-breaker poster presentation (HBeAg positive patients).

EASL’s 2020 meeting had been scheduled to occur in April 2020, but it was rescheduled to August 27 to 29, 2020 as a digital meeting due to the COVID-19 pandemic.

Initiation of a study evaluating treatment intensification with H0731 in patients with chronic HBV infection who are only partially virologically suppressed on nucleos(t)ide analog reverse transcriptase inhibitor (NrtI) therapy alone after at least a year of treatment.

ABI-H2158 (H2158), our second -generation core inhibitor product candidate in the HBV Cure program :

Upcoming reporting of data on the final dose-ranging cohorts of the Phase 1b portion of the Phase 1a/1b clinical study of H2158 at EASL 2020 in a late-breaker poster presentation.

Upcoming initiation of a Phase 2 clinical study using a 300 mg dose of H2158.

Initiation of a Phase 2 clinical study using a 300 mg dose of H2158.

Upcoming reporting of detailed data on the final dose-ranging cohorts of the Phase 1b portion of the Phase 1a/1b clinical study of H2158 at EASL 2020 in a late-breaker poster presentation.

Receipt of Fast Track Designation from the U.S.

Food and Drug Administration (FDA).

ABI-H3733 (H3733), our third core inhibitor product candidate in the HBV Cure program :

Continuation of a Phase 1 clinical study to evaluate safety, tolerability, and pharmacokinetics of H3733 in healthy subjects.

Continuation of a Phase 1 clinical study to evaluate safety, tolerability, and pharmacokinetics (PK) of H3733 in healthy subjects.

China HBV Collaboration :

Subsequent to the period, on July 17, 2020, entry into a Collaboration Agreement (China Collaboration Agreement) with BeiGene, Ltd.

(BeiGene) to develop, manufacture and commercialize H0731, H2158 and H3733.

Under the terms of the agreement, we granted BeiGene an exclusive, royalty-bearing license to develop and commercialize products containing H0731, H2158 and H3733 in the People’s Republic of China, Hong Kong, Taiwan and Macau.

Microbiome Program

Selection of the ABI-M201 (M201) ulcerative colitis (UC) program for presentation as a poster at the Digestive Disease Week’s (DDW) 2020 Virtual Meeting.

Selection of preclinical data from our immuno-oncology microbiome program for presentation as an e-poster at the American Association for Cancer Research (AACR) 2020 Virtual Annual Meeting II to be held on June 22 to 24, 2020.

Presentation of preclinical data from our immuno-oncology microbiome program for presentation as an e-poster at the American Association for Cancer Research (AACR) 2020 Virtual Annual Meeting II.

Return of worldwide rights to all of our microbiome gastrointestinal programs previously licensed to Allergan Pharmaceuticals International Limited (Allergan) under the Research, Development, Collaboration and License Agreement (Allergan Collaboration Agreement) pending completion of transition in the fourth quarter of 2020 and exploration of strategic alternatives to continue development of the Microbiome programs following the return of rights.

Corporate Highlights

Strengthening of our leadership team with the addition of Jason Okazaki as Chief Legal and Business Officer and Carl Henrik Enell as Senior Vice President, Corporate Development.

Strengthening of our leadership team with the addition of William Delaney IV, Ph.D.

as Chief Scientific Officer, Virology.

HBV Cure Program

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We presented certain top-line information and other updates regarding Study 201 and Study 211 in May 2020, and we expect to report additional data from Study 201 as well as further interim data from Study 211 at EASL 2020 in August 2020 .

In addition, we recently determined the stopping criteria by which we will begin transitioning patients off therapy in Study 211.

In addition, we recently determined the stopping criteria by which we will transition patients off therapy in Study 211.

These criteria have been discussed with our lead investigators and reviewed and agreed upon by the FDA.

Later this year, we expect to begin transitioning patients off treatment to observe for sustained virologic response.

At this time, the ongoing COVID-19 pandemic has not impacted our timeline for the upcoming transition of patients off treatment or completion of Study 211, but we will continue to monitor the situation closely.

In June 2020, we began transitioning patients who met the stopping criteria off treatment to observe for sustained virologic response.

At this time, the ongoing COVID-19 pandemic has not impacted our timeline for transition of patients off treatment or completion of Study 211, but we will continue to monitor the situation closely.

H2158, our second-generation core inhibitor product candidate in the HBV Cure program, was internally discovered and developed and is chemically distinct from H0731.

In the second quarter of 2019, we presented final data from the Phase 1a portion of a Phase 1a/1b dose-ranging clinical study.

The Phase 1a study assessed safety, tolerability and pharmacokinetics (PK) in 48 healthy volunteers.

The Phase 1a study assessed safety, tolerability and PK in 48 healthy volunteers.

In the fourth quarter of 2019, we reported interim data from the first, low-dose cohort of the Phase 1b portion of the Phase 1a/1b dose-ranging clinical study, which enrolled HBeAg positive patients.

We presented additional top-line data from the dose-ranging cohorts of the Phase 1b portion of the Phase 1a/1b dose-ranging clinical study in May 2020, and we expect to report the final data from these cohorts at EASL 2020.

Based on data from the Phase 1b dose-ranging study, we expect to initiate a Phase 2 clinical study in the second quarter of 2020 using a 300 mg dose of H2158.

Based on data from the Phase 1b dose-ranging study, we initiated a Phase 2 clinical study in June 2020 using a 300 mg dose of H2158.

This study will be conducted in approximately ten countries in Asia, North America and Europe.

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In the first quarter of 2020, we initiated a Phase 1 clinical study to evaluate safety, tolerability and PK following single ascending dose and multiple ascending dose administration of H3733 in healthy subjects in New Zealand.

Enrollment of the study has been delayed as a result of the government mandated shutdown of all clinical studies unrelated to COVID-19.

We expect to resume enrollment in the second quarter of this year and do not expect this delay to have a significant impact on our clinical development timelines for H3733 .

After a short delay in enrollment of the study due to the government-mandated shutdown of all clinical studies unrelated to COVID-19, we resumed enrollment during the second quarter of this year.

This delay did not have a significant impact on our clinical development timelines for H3733 .

Other Product Candidates

In addition to our three clinical-stage product candidates, our research discovery team is actively focused on identifying and creating additional product candidates for our HBV Cure program.

In addition to our three clinical-stage product candidates, our research discovery team is actively focused on identifying and developing additional product candidates for our HBV Cure program.

China HBV Collaboration Agreement

On July 17, 2020, we entered into the China Collaboration Agreement with BeiGene, granting BeiGene an exclusive, royalty-bearing license to develop and commercialize products containing H0731, H2158 and H3733 in the People’s Republic of China, Hong Kong, Taiwan and Macau (the Territory).

Under the China Collaboration Agreement, we and BeiGene will collaborate on development activities with respect to the licensed products in accordance with a mutually agreed upon development plan.

Pursuant to the terms of the China Collaboration Agreement, BeiGene paid us an upfront amount of $40.0 million, and we are eligible to receive up to approximately $500.0 million in milestone payments, comprised of up to $113.8 million in development and regulatory and $385.0 million in net sales milestone payments.

In addition, we are eligible to receive tiered royalties at percentages ranging from the mid-teens to the low 30s of net sales.

BeiGene has also agreed to pay all development and regulatory costs up to an aggregate of $45.0 million in the territory for H0731, H2158 and H3733.

Following this initial investment, we and BeiGene will share development costs for the Territory equally.

The China Collaboration Agreement also contains provisions such as representations and warranties of the parties , terms as to governance of the collaboration, commercialization and regulatory responsibilities of the parties, and manufacturing and supply, including potential adjustments in the event supply costs exceed certain levels.

In addition, during the term of the China Collaboration Agreement, neither party will commercialize any competing products in the T erritory.

If, after ABI-H2158 and ABI-H3733 reach the end of Phase 2 clinical trials, we and BeiGene are unable to mutually agree on the terms of a Phase 3 global study, BeiGene may elect to terminate the China Collaboration Agreement solely as it relates to that compound, as applicable.

Such a termination would result in us regaining all rights to the applicable compound in the Territory.

In addition, BeiGene may terminate the China Collaboration Agreement for convenience at any time upon 90 days’ advance written notice to us.

The China Collaboration Agreement also contains customary provisions for termination by either party, including in the event of breach of the China Collaboration Agreement, subject to cure.

Microbiome Program

In recent years, there has been increasing scientific evidence suggesting the therapeutic potential of the human microbiome—the billions of microbes living in and on people—to impact health and disease.

Our Microbiome program builds upon experience reported in the literature of successfully treating various disease indications with fecal microbiota transplants (FMT) and seeks to provide a pharmacologically relevant therapy using a “drug like” approach that delivers targeted and specific microbiome therapies in an oral capsule.

Our Microbiome program builds upon experience reported in the literature of successfully treating various disease indications with fecal microbiota transplants and seeks to provide a pharmacologically relevant therapy using a “drug like” approach that delivers targeted and specific microbiome therapies in an oral capsule.

Our Microbiome program consists of a fully integrated platform that includes a biological-function-based strain isolation, identification, characterization and selection process, methods for strain purification and growth under conditions compliant with cGMP requirements, and a licensed patented delivery system that we call GEMICEL®, which is designed to allow for targeted oral delivery of live biologic and conventional therapies to the lower GI tract.

Our Microbiome program’s lead candidate, M201, is in a multi-center, randomized, double-blind, placebo-controlled Phase 1b clinical trial to evaluate its safety and efficacy in patients with mildly to moderately active UC who are being treated with mesalamine.

The study’s primary objective is safety and tolerability, and its secondary objectives focus on the effect of M201 treatment on disease activity measures in patients with UC.

This Phase 1b study is ongoing;

however, continued enrollment has been delayed as a result of the COVID-19 pandemic and the limitations placed on some trial sites to conduct certain procedures as part of the patient screening

however, continued enrollment has been delayed as a result of the COVID-19 pandemic and the limitations placed on some trial sites to conduct certain procedures as part of the patient screening process.

We expect enrollment activities to resume in mid-2020, and we continue to monitor the situation closely.

For currently enrolled patients who are unable to come to the clinic, study drug or placebo is being shipped to their home s and sites are conducting telehealth monitoring and home health nurse visits.

M201 is being developed as part of the Research, Development, Collaboration and License Agreement (the Collaboration Agreement) with Allergan.

The Collaboration Agreement provides for the development and commercialization of microbiome gastrointestinal programs.

Preclinical data from the M201 program was selected for presentation as a poster at DDW 2020.

For currently enrolled patients who are unable to come to the clinic, study drug or placebo is being shipped to their homes and sites are conducting telehealth monitoring and home health nurse visits.

Preclinical data from the M201 program was selected for presentation as a poster at Digestive Disease Week (DDW) in May 2020;

however, DDW 2020 was cancelled due to the COVID-19 pandemic.

M201 is being developed as part of the Allergan Collaboration Agreement, which provides for the development and commercialization of microbiome gastrointestinal programs.

We expect the Phase 1b study of M201 to continue despite the pending termination of the Allergan Collaboration Agreement.

See “—Allergan Collaboration Agreement.”

Additional Product Candidates

Using our microbiome platform capabilities, we are also exploring additional product candidates for other disease indications, including Crohn’s disease (CD) and IBS in connection with the Collaboration Agreement, as well as immune-mediated and metabolic disorders and oncology, which indications we will pursue either internally or in collaboration with other third parties.

Preclinical data from our immuno-oncology microbiome program have been selected for presentation as a poster at AACR.

We currently have corporate and administrative offices and research laboratory space in South San Francisco, California, research, development and small-scale manufacturing activities in Groton, Connecticut and administrative offices in Carmel, Indiana.

Using our microbiome platform capabilities, we are also exploring additional product candidates for other disease indications, including Crohn’s disease and irritable bowel syndrome in connection with the Allergan Collaboration Agreement, as well as immune-mediated and metabolic disorders and oncology, which indications we will pursue either internally or in collaboration with other third parties.

Preclinical data from our immuno-oncology microbiome program was presented as an e-poster at AACR in June 2020.

Allergan Collaboration Agreement

In May 2020, AbbVie Inc.

(AbbVie) completed its acquisition of Allergan.

In June 2020, AbbVie notified us that it decided to terminate the Allergan Collaboration Agreement.

This decision was not based on any efficacy, safety or other data related to collaboration programs.

The termination will be effective on October 10, 2020, until which time AbbVie is obligated to continue to reimburse us for certain research and development costs.

After such time, we will regain worldwide rights to all microbiome candidates subject to the collaboration, including M201.

We have begun exploring strategic alternatives to continue development of the Microbiome programs following the return of the related intellectual property rights.

We currently have corporate and administrative offices and research laboratory space in South San Francisco, California and research, development and small-scale manufacturing activities in Groton, Connecticut.

We also currently have an administrative office and research laboratory space in Shanghai, China and a regulatory office in Beijing, China.

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We have generated significant losses to date, and we expect to continue to generate losses as we continue to develop our product candidates.

As of March 31, 2020, we had an accumulated deficit of $466.1 million.

As of June 30, 2020, we had an accumulated deficit of $458.8 million.

Because we do not generate revenue from any of our product candidates, our losses will continue as we further develop and seek regulatory approval for, and commercialize, our product candidates.

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We are unable to predict the extent of any future losses or when we will become profitable, if at all.

While our employees in the United States are currently under stay-at-home or shelter-in-place orders under state and local laws in response to the COVID-19 pandemic, as a biotechnology company, we qualify as a Healthcare Operation and are exempted under such orders.

This exemption allows our employees to perform essential activities at our offices, including work in our laboratories in both South San Francisco and Groton with proper protections and procedures in place.

In mid-March 2020, as a result of the COVID-19 pandemic, six San Francisco Bay Area counties announced a shelter-in-place order, restricting all residents to their homes, with few exceptions.

Within a week, both California and Connecticut issued state-wide stay-at-home orders.

As a biotechnology company, we were exempt from such orders.

California’s state-wide and local orders remain in place.

Connecticut’s order expired in May 2020.

Because of the exemptions described above, there has not been any significant interruption to date of essential activities at our offices, including work in our laboratories in both South San Francisco and Groton with proper protections and procedures in place.

While we have experienced some shipping delays or shortages of personal protective equipment (PPE) that are important to maintaining normal workflows in our laboratories, we have been able to continue our critical research activities through schedule shifts, use of PPE on-hand and reallocation of certain resources that allow our employees to practice “social distancing” and comply with applicable laws.

In addition, substantially all of our non-research employees have been working from their homes since mid-March 2020.

Clinical study-related impacts of the COVID-19 pandemic to date have been limited to enrollment delays for both our Phase 1 study of H3733 and our Phase 1b study of M201, which are the only studies that are currently enrolling.

Notwithstanding the expiration of Connecticut’s stay-at-home order, substantially all of our U.S.-based non-research employees at both our South San Francisco and Groton facilities have been working from their homes since mid-March 2020.

Clinical study-related impacts of the COVID-19 pandemic to date have been limited to short enrollment delays for our Phase 1 study of H3733 and our Phase 1b study of M201.

We cannot currently predict the specific extent, duration or full impact that the COVID-19 pandemic will have on our ongoing and planned research efforts, clinical trials and other business operations.

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Results of Operations

Comparison of the Three Months Ended March 31, 2020 and 2019

Comparison of the Three Months Ended June 30, 2020 and 2019

Collaboration Revenue

The following table summarizes the period-over-period changes in our collaboration revenue (in thousands, except for percentages):

Three Months Ended March 31,

Three Months Ended June 30,

Collaboration revenue

Collaboration revenue includes the recognition of deferred revenue and reimbursements incurred under the Collaboration Agreement.

Revenue for the three months ended March 31, 2020 as compared to the same period in 2019 increased as a result of increased reimbursement activities associated with our development activities under the Collaboration Agreement.

Collaboration revenue includes the recognition of deferred revenue and reimbursements incurred under the Allergan Collaboration Agreement, for which AbbVie (formerly Allergan pre-acquisition) gave written notice of termination in June 2020.

As a result, we recognized in collaboration revenue the remaining deferred revenue balance of $36.0 million upon receipt of the termination notice.

Research and Development Expense

The following table summarizes the period-over-period changes in our research and development expenses (in thousands, except for percentages):

Three Months Ended March 31,

Three Months Ended June 30,

Program/Description

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Total research and development expenses

Research and development expense were $23.0 million for the three months ended March 31, 2020 compared to $22.7 million for the same period in 2019.

The increase was primarily due to an increase of $0.4 million in gross research and development expenses related to the Microbiome programs and a decrease of $0.1 million in research and development expenses related to the HBV programs.

Research and development expenses include non-cash stock-based compensation expenses of $1.9 million for the three months ended March 31, 2020 and $ 2.7 million for the same period in 2019.

(1) Expenses presented for the Microbiome program exclude collaboration revenue related to expense reimbursements under the Allergan Collaboration Agreement as discussed in Note 8 to the Condensed Consolidated Financial Statements.

Research and development expenses were $23.3 million for the three months ended June 30, 2020 compared to $18.7 million for the same period in 2019.

The increase was primarily due to an increase of $3.9 million in research and development expenses related to the HBV Cure program and an increase of $0.8 million in research and development expenses related to the Microbiome program.

Research and development expenses include non-cash stock-based compensation expenses of $3.6 million for the three months ended June 30, 2020 and $3.1 million for the same period in 2019.

General and Administrative Expense

The following table summarizes the period-over-period changes in our general and administrative expenses (in thousands, except for percentages):

Three Months Ended March 31,

Three Months Ended June 30,

General and administrative expenses

General and administrative expense consists primarily of salaries, consulting fees and other related costs, professional fees for legal services, accounting and tax services, insurance and travel expenses, as well as the stock-based compensation expense associated with equity awards to our employees, consultants, and directors.

General and administrative expenses were $8.7 million for the three months ended March 31, 2020 compared to $9.5 million for the same period in 2019.

An increase in employee-related expenses of $0.5 million was largely offset due to a decrease of $0.2 million in professional fees and a decrease of $0.3 million in rent expense due to the move of our leased office and laboratory space from San Francisco to South San Francisco in February 2019.

General and administrative expenses include non-cash stock-based compensation expenses of $3.0 million for the three months ended March 31, 2020 and $3.8 million for the same period in 2019.

General and administrative expenses were $9.5 million for the three months ended June 30, 2020 compared to $4.1 million for the same period in 2019.

The increase includes an increase of $0.7 million in salary and benefits and an increase of $0.2 million in recruitment expenses due to additional employees as well as an increase of $0.3 million in professional fees.

These increases were partially offset by a decrease of $0.4 million in travel related expenses due to state and local laws restricting travel in response to the COVID-19 pandemic.

General and administrative expenses include non-cash stock-based compensation expenses of $3.5 million for the three months ended June 30, 2020 and a $1.1 million reduction of expense for the same period in 2019.

Stock-based compensation expense for the three months ended June 30, 2019 includes the reversal of previously recognized expense of $3.6 million related to forfeited awards resulting from the departure of one of the Company’s former officers during the period.

Comparison of the Six Months Ended June 30, 2020 and 2019

Collaboration Revenue

The following table summarizes the period-over-period changes in our collaboration revenue (in thousands, except for percentages):

Six Months Ended June 30,

Collaboration revenue

As a result, we recognized in collaboration revenue the remaining deferred revenue balance of $36.0 million upon receipt of the termination notice.

Research and Development Expense

The following table summarizes the period-over-period changes in our research and development expenses (in thousands, except for percentages):

Six Months Ended June 30,

Program/Description

HBV Cure program

Microbiome program (1)

Total research and development expenses

Research and development expense s were $ 46.4 million for the six months ended June 30, 2020 compared to $ 41.4 million for the same period in 2019 .

The increase was primarily due to an increase of $ 3.8 million in research and development expenses related to the HBV Cure program and an increase of $ 1.2 million in research and development expenses related to the Microbiome program .

Research and development expenses include non-cash stock-based compensation expenses of $ 5.6 million for the six months ended June 30, 2020 and $ 5.8 million for the same period in 2019 .

General and Administrative Expense

The following table summarizes the period-over-period changes in our general and administrative expenses (in thousands, except for percentages):

Six Months Ended June 30,

General and administrative expenses

General and administrative expenses were $18.2 million for the six months ended June 30, 2020 compared to $13.6 million for the same period in 2019.

The increase includes an increase of $1.2 million in salary and benefits and an increase of $0.2 million in recruitment expenses due to additional employees partially offset by a decrease of $0.6 million in travel related expenses due to state and local laws restricting travel in response to the COVID-19 pandemic.

General and administrative expenses include non-cash stock-based compensation expenses of $6.5 million for the six months ended June 30, 2020 and $2.8 million for the same period in 2019.

Stock-based compensation expense for the six months ended June 30, 2019 includes the reversal of previously recognized expense of $3.6 million related to forfeited awards resulting from the departure of one of the Company’s former officers during the period.

Liquidity and Capital Resources

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As a result of our significant research and development expenditures and the lack of any FDA-approved products to generate product sales revenue, we have not been profitable and have generated operating losses since we were incorporated in October 2005.

We have funded our operations through March 31, 2020 principally through equity financings, raising an aggregate of $546.4 million in net proceeds, and a strategic collaboration raising an aggregate of $50.0 million through an upfront payment.

Cash Flows for the Three Months Ended March 31, 2020 and 2019

We have funded our operations through June 30, 2020 principally through equity financings, raising an aggregate of $546.4 million in net proceeds, and a strategic collaboration raising an aggregate of $50.0 million through an upfront payment.

Cash Flows for the Six Months Ended June 30, 2020 and 2019

The following table summarizes our cash flow activities (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash provided by (used in):

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Net Cash from Operating Activities

Net cash used in operating activities was $25.2 million for the three months ended March 31, 2020.

This was primarily due to a $26.7 million net loss, $0.1 million of accretion of discount of marketable securities and a decrease of $4.6 million of operating assets and liabilities, which were offset by $4.9 million non-cash expense recorded for stock-based compensation, $1.2 million of amortization of operating lease right-of-use (ROU) assets and $0.1 million of depreciation and amortization expense.

Net cash used in operating activities was $23.9 million for the three months ended March 31, 2019.

Net cash used in operating activities was $48.3 million for the six months ended June 30, 2020.

This was primarily due to a $19.4 million net loss, $0.1 million of accretion of discount of marketable securities and a decrease of $43.5 million of operating assets and liabilities, which includes the recognition of the remaining deferred revenue balance of $36.0 million as revenue during the six months ended June 30, 2020 in connection with AbbVie’s decision to terminate the Allergan Collaboration Agreement as discussed in Note 8.

These decreases were partially offset by $12.1 million non-cash expense recorded for stock-based compensation, $2.3 million of amortization of operating lease right-of-use (ROU) assets and $0.2 million of depreciation and amortization expense.

Net cash used in operating activities was $ 44.9 million for the six months ended June 30, 2019 .

This was primarily due to a $ 45.6 million net loss , $ 1.1 million of accretion of discount of marketable securities and a decrease of $ 9.4 million of operating assets and liabilities, which were offset by $ 8.6 million non-cash expense recorded for stock-based compensation, $ 2.2 million of amortization of operating lease ROU assets and $ 0.3 million of depreciation and amortization expense.

Net Cash from Investing Activities

Net cash provided by investing activities for the three months ended March 31, 2020 was $20.7 million due to $55.0 million of redemptions of marketable securities and $10.0 million of sale of marketable securities, which were partially offset by the purchase of $44.2 million of marketable securities and $0.1 million of property and equipment.

Net cash provided by investing activities for the three months ended March 31, 2019 was $11.4 million primarily due to the purchase of $49.0 million of marketable securities and $1.5 million of property and equipment, which were offset by $61.5 million of redemptions of marketable securities and $0.5 million of sale of marketable securities.

Net cash provided by investing activities for the six months ended June 30, 2020 was $97.2 million due to $119.3 million of redemptions of marketable securities and $22.7 million of sale of marketable securities, which were partially offset by the purchase of $44.2 million of marketable securities and $0.5 million of property and equipment.

Net cash provided by investing activities for the six months ended June 30, 2019 was $36.9 million primarily due to $131.6 million of redemptions of marketable securities and $0.5 million of sale of marketable securities , which were partially offset by the purchase of $93.7 million of marketable securities and $1.5 million of property and equipment.

Net Cash from Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2020 was $0.1 million resulting from the exercise of stock options to purchase 16,834 shares of common stock.

Net cash provided by financing activities for the three months ended March 31, 2019 was $0.1 million resulting from the exercise of stock options to purchase 21,000 shares of common stock.

Net cash provided by financing activities for the six months ended June 30, 2020 was $1.1 million resulting from the exercise of stock options to purchase 91,713 shares of common stock and the issuance of 42,266 shares of common stock under our ESPP.

Net cash provided by financing activities for the six months ended June 30, 2019 was $0.8 million resulting from the exercise of stock options to purchase 50,875 shares of common stock and the issuance of 36,804 shares of common stock under our ESPP.

Funding Requirements

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In addition, our product candidates, if approved, may not achieve commercial success.

Our commercial revenues, if any, will be derived from sales of medicines that we do not expect to be commercially available for many years, if at all.

Our commercial revenues, if any, will be derived from sales of therapeutics that we do not expect to be commercially available for many years, if at all.

Accordingly, we will need to continue to rely on additional financings to achieve our business objectives.

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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