What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-05 · 81 added, 72 removed, 135 unchanged (53% of the section changed)

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The conduct of our initial Phase 2 studies, Study 201 and 202, is complete.

Our open-label extension study, Study 211, involved treating patients with VBR plus nucelos(t)ide analog reverse transcriptase inhibitors (NrtIs) and ultimately transitioning patients who met the requisite stopping criteria, as determined with our lead investigators and the U.S.

In these studies, VBR administered with nucleos(t)ide analogue reverse transcriptase inhibitor (NrtI) therapy demonstrated a favorable safety profile and led to greater viral suppression of both HBV DNA and HBV pre-genomic RNA (pgRNA) than NrtI therapy alone.

Our open-label extension study, Study 211, involved treating patients with VBR plus NrtIs and ultimately transitioning patients who met the requisite stopping criteria, as determined with our lead investigators and the U.S.

Food and Drug Administration (FDA), off of therapy to test for sustained virologic response (SVR).

SVR refers to sustained viral suppression (more than six months) of HBV DNA below the lower limit of quantification (LLOQ) and would be consistent with a successful finite treatment for chronic HBV infection.

It became clear that patients who stopped therapy in Study 211 had not achieved meaningful SVR rates, as all 41 patients ultimately relapsed, meaning they had detectable HBV, and that dual combination therapy of VBR plus NrtIs is insufficient to cure chronic HBV infection.

It became clear that patients who stopped therapy in Study 211 had not achieved SVR, as all 41 patients ultimately relapsed, meaning they had detectable HBV, and that dual combination therapy of VBR plus NrtIs is insufficient to cure chronic HBV infection in the studied population.

Based on these results, we terminated Study 211 in the fourth quarter of 2020.

We presented additional follow-up from Study 211 related to virologic response, safety and resistance following treatment discontinuation, at the European Association for the Study of the Liver’s (EASL) International Liver Congress TM in June 2021 (EASL 2021).

Additional follow-up data from Study 211 demonstrate that patients have increases of HBV DNA and pgRNA after discontinuation of VBR despite continued NrtI treatment, which further supports that

core inhibitors deepen viral suppression in combination with NrtIs.

These results will be shared in an oral presentation at the American Association for the Study of Liver Diseases (AASLD) Annual Meeting in November 2021 (AASLD 2021).

Based on discussions with leading viral hepatitis experts, global regulatory discussions and feedback and, with respect to the China territory, discussions and agreement with our collaboration partner, BeiGene, Ltd.

(BeiGene), in

the first quarter of 2021, we decided to not move forward with global registrational studies for VBR as a chronic suppressive treatment (CST) with NrtI s .

(BeiGene), in the first quarter of 2021, we decided to not move forward with global registrational studies for VBR as a chronic suppressive treatment (CST) with NrtIs.

The decision was made to focus on the greatest unmet medical need of patients, which lies predominantly in cure, rather than CST.

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Study 205 had been initiated to evaluate treatment intensification with VBR in patients with chronic HBV infection who are only partially virologically suppressed on NrtI.

Our second-generation core inhibitor product candidate, ABI-H2158 (2158), was internally discovered and developed and is chemically distinct from VBR.

Based on data from a completed Phase 1b dose-ranging study, we initiated a Phase 2 clinical study in June 2020 using a 300 mg daily dose of 2158.

This study is being conducted in Asia, North America and Europe.

We expect interim data from this study in the second half of 2021, which will focus on safety and on-treatment changes in key viral biomarkers, including pre-genomic RNA and HBV e- and core related antigens.

While we will continue to monitor the situation closely, we do not currently expect our timelines for this study to be significantly impacted by the COVID-19 pandemic.

Like 2158, our third core inhibitor product candidate, ABI-H3733 (3733), was also internally discovered and developed.

The chemical scaffold of 3733 is novel and separate from both VBR and 2158.

Our first of two next-generation core inhibitor product candidates, ABI-H3733 (3733), was internally discovered and developed.

The chemical scaffold of 3733 is novel and distinct from each of VBR, our other next-generation core inhibitor product candidate, ABI-4334 (4334), and our discontinued core inhibitor product candidate, ABI-H2158 (2158).

In the first quarter of 2020, we initiated a Phase 1a clinical study to evaluate safety, tolerability and pharmacokinetics (PK) following single ascending dose and multiple ascending dose administration of 3733 in healthy subjects in New Zealand.

Conduct for the study was completed in the fourth quarter of 2020 and preliminary data indicate that 3733 was generally well-tolerated and had favorable PK.

We presented observations on the enhanced potency and target coverage for both antiviral inhibition and inhibition of cccDNA generation for our next generation core inhibitors 2158 and 3733 at EASL 2021.

Additional Product Candidates

In addition to our three clinical-stage product candidates, our research discovery team is actively focused on identifying and selecting a fourth core inhibitor candidate, which we anticipate in mid-2021.

Results from the Phase 1a clinical study, detailing safety and PK of 3733 will be shared in a poster presentation at AASLD 2021.

In addition, we presented observations on the enhanced potency and target coverage for both antiviral inhibition and inhibition of cccDNA generation for 3733 at EASL 2021.

We plan to initiate a Phase 1b study with an improved formulation of 3733 in patients with chronic HBV infection in 2022.

In mid-2021, we announced the selection of our other next-generation core inhibitor candidate, 4334.

As with all of our core inhibitor candidates nominated after VBR, 4334 was internally discovered and developed.

In addition, the chemical scaffold of 4334 is also novel and distinct from each of VBR, 3733 and 2158.

We nominated 4334 based on a preclinical target drug profile that indicates enhanced target coverage and potency to prevent both formation of new virus and cccDNA, which is responsible for maintaining the HBV viral reservoir.

We believe that 4334 has a best-in-class preclinical profile, with single-digit nanomolar potency against the production of new virus and the formation of cccDNA.

Preclinically to date, 4334 has also demonstrated pan-genotypic activity, an improved resistance profile and a favorable safety profile.

Preclinical characterization of 4334 will be shared in a poster presentation at AASLD.

We continue to conduct preclinical work on 4334, with the aim of completing regulatory filings and initiating clinical studies in 2022.

In September 2021, we discontinued development of 2158 following the observation of elevated alanine transaminase (ALT) levels in the Phase 2 clinical study consistent with drug-induced hepatotoxicity.

Multi-Drug Combination Studies

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Therefore, as we continue to develop and advance our core inhibitors through clinical studies, we will conduct multi-drug combination studies that add additional drugs (or compounds) with non-overlapping mechanisms of action to the core inhibitor + NrtI antiviral backbone.

We currently have two on-going triple combination studies with our lead core inhibitor, VBR, which has been observed to be well-tolerated and have antiviral activity in combination with NrtI in completed Phase 2 studies.

We currently have two on-going triple combination studies and a third study expected to begin in the first half of 2022 with our lead core inhibitor, VBR, which has been observed to be well-tolerated and have additional antiviral activity in combination with NrtI compared to NrtI alone in completed Phase 2 studies.

Our first triple combination study is being conducted pursuant to a Clinical Trial Collaboration Agreement with Arbutus Biopharma Corporation (Arbutus Biopharma) and consists of a randomized, multi-center, open-label Phase 2 clinical study to explore the safety, PK and antiviral activity of the triple combination of VBR, NrtI and AB-729 (Arbutus Biopharma’s investigational RNAi candidate) compared to the dual combinations of VBR + NrtI and AB-729 + NrtI in virologically suppressed subjects.

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Both studies initiated in the first quarter of 2021.

We also recently announced that we have entered into a Clinical Trial Collaboration Agreement with Antios Therapeutics, Inc.

(Antios) to evaluate ATI-2173, Antios’s investigational proprietary active site polymerase inhibitor nucleotide (ASPIN), VBR and tenofovir disoproxil fumarate, an NrtI.

The multi-center, double-blinded, placebo-controlled cohort will evaluate the safety, PK and antiviral activity of this all-oral triple combination.

This cohort is expected to start in the first half of 2022 and enroll ten treatment-naïve or off-treatment HBeAg negative or positive patients in a 12-week treatment study.

In addition to the above studies, we expect to pursue additional multi-drug combinations that include our current and future core inhibitors as they advance in clinical development.

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In addition to the advancement of our core inhibitor portfolio and our conduct of multi-drug combination studies, our Research team is developing cccDNA disruptors and small molecules targeting novel undisclosed targets to add to the core inhibitor + NrtI antiviral backbone to achieve finite and curative therapies.

In November 2020, we

entered into an exclusive, two-year collaboration and option agreement with Door Pharmaceuticals , LLC (Door Pharma) focused on the development of a novel class of HBV inhibitors.

Door Pharma’s discovery platform targets functions of HBV core protein distinct from viral assembly and ha s the potential to interfere with viral nucleic acid , including nuclear cccDNA.

In November 2020, we entered into an exclusive, two-year collaboration and option agreement with Door Pharmaceuticals, LLC (Door Pharma) focused on the development of a novel class of HBV inhibitors.

Door Pharma’s discovery platform targets functions of HBV core protein distinct from viral assembly and has the potential to interfere with viral nucleic acid, including nuclear cccDNA.

Together with Door Pharma, we are working on identifying cccDNA disruptors, which will be aimed at inhibiting different steps in the viral replication cycle that complement the activity of our core inhibitors.

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In return for an up-front payment and success-based milestones and royalties, we received an exclusive option to license compounds arising from the collaboration and will be responsible for the continued development and commercialization of optioned compounds.

We currently have corporate and administrative offices and research laboratory space in South San Francisco, California as well as a small office in China.

We currently have corporate and administrative offices and research laboratory space in South San Francisco, California as well as registrational offices in China.

Since our inception, we have had no revenue from product sales and have funded our operations principally through debt financings prior to our initial public offering in 2010 and through equity financings and collaborations since then.

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

As of June 30, 2021, we had an accumulated deficit of $552.4 million.

As of September 30, 2021, we had an accumulated deficit of $571.2 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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On June 15, 2021, California reopened its economy, and all applicable local orders were also lifted on June 15, 2021.

On August 3, 2021, eight Bay Area counties, including where our headquarters is located, orders that require face coverings to be worn indoors became effective.

Effective August 3, 2021, eight Bay Area counties, including where our headquarters is located, required face coverings to be worn indoors.

We do not expect this mandate to result in any significant interruption of the essential activities ongoing at our South San Francisco facility.

There has not been any significant interruption to date of essential activities at our offices, including work in our laboratories with proper protections and procedures in place.

In addition, we have taken the additional step of requiring that all of our employees be fully vaccinated against COVID-19.

T here has not been any significant interruption to date of essential activities at our offices, including work in our laboratories 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.

Substantially all of our U.S.-based 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 short enrollment delays for our Phase 1 study of 3733.

S ubstantially all of our U.S.-based non-research employees have been working from their homes since mid-March 2020 .

To date, our current and future planned clinical and nonclinical studies have not been significantly impacted by the COVID-19 pandemic.

We continually work with our contract research organizations (CROs) and other vendors to ensure, to the extent possible, that services are provided in a timely manner while also identifying alternative vendors and strategies to utilize in the event that COVID or third party-related delays threaten our ability to meet our timelines.

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 studies and other business operations.

We continue to monitor the situation regularly for additional potential delays, or modifications to our ongoing and planned studies and, if circumstances warrant, we may adjust our budget and operating plan.

We continue to monitor the situation regularly for additional potential delays, or modifications to our ongoing and planned studie s and, if circumstances warrant, we may adjust our budget and operating plan.

Critical Accounting Policies and Significant Judgments and Estimates

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Results of Operations

Comparison of the Three Months Ended June 30, 2021 and 2020

Comparison of the Three Months Ended September 30, 2021 and 2020

Collaboration Revenue

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

Three Months Ended June 30,

Three Months Ended September 30,

Collaboration revenue

Collaboration revenue for the three months ended June 30, 2020 includes the recognition of deferred revenue and reimbursements incurred under the Research, Development, Collaboration and License Agreement (the Allergan Agreement) that we entered into with Allergan Pharmaceuticals Limited (Allergan).

Following its acquisition of Allergan, AbbVie, Inc.

(AbbVie) gave written notice of termination of the Allergan Agreement in June 2020, which became effective October 2020.

Collaboration revenue for the three months ended September 30, 2021 consists of the recognition of deferred revenue allocated to 2158 under the Collaboration Agreement (the BeiGene Agreement) with BeiGene, Ltd.

(BeiGene) upon discontinuing development of 2158 .

Collaboration revenue for the three months ended September 30, 2020 consists of $31.0 million recognized for the transfer of the VBR License upon entering into the BeiGene Agreement as well as reimbursements incurred under the Research, Development, Collaboration and License Agreement (the Allergan Agreement) that we entered into with Allergan Pharmaceuticals Limited (Allergan).

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 June 30,

Three Months Ended September 30,

Program/Description

HBV Cure program

Microbiome program

Total research and development expenses

Research and development expenses were $16.7 million for the three months ended June 30, 2021 compared to $23.3 million for the same period in 2020.

The decrease was due to a decrease of $7.6 million related to the wind-down of the Microbiome program, partially offset by an increase of $1.0 million in research and development expenses related to the HBV program.

The increase in the HBV program expense was primarily due to increases in clinical activities, chemistry and manufacturing control activities to support our clinical studies and increased salary and benefits due to additional employees.

Research and development expenses include $0.7 million in non-cash stock-based compensation expense for the three months ended June 30, 2021 compared to $3.6 million for the same period in 2020.

Research and development expenses were $18.5 million for the three months ended September 30, 2021 compared to $26.9 million for the same period in 2020.

The decrease was due to a decrease of $8.3 million related to the wind-down of the Microbiome program and a decrease of $0.2 million in research and development expenses related to the HBV program.

Research and development expenses consist of $1.1 million in non-cash stock-based compensation expense for the three months ended September 30, 2021 compared to $2.8 million for the same period in 2020.

The decrease in stock-based compensation is primarily due to a decrease in the grant date fair value of recent option grants as well as a decrease in headcount and outstanding awards resulting from the wind-down of the Microbiome program.

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

Three Months Ended June 30,

Three Months Ended September 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 stock-based compensation expense associated with equity awards to our employees, consultants, and directors.

General and administrative expenses were $6.9 million for the three months ended June 30, 2021 compared to $9.5 million for the same period in 2020.

General and administrative expenses include non-cash stock-based compensation expenses of $1.2 million for the three months ended June 30, 2021 and $3.5 million for the same period in 2020.

The decrease in stock-based compensation expense of $2.3 million was due to a decrease in the grant date fair value of recent option grants and a reversal of $0.6 million of previously recognized expense in the three months ended June 30, 2021 related to forfeited awards from terminated employees.

Additionally, for the three months ended June 30, 2020, we recognized $0.7 million as a cumulative catch-up adjustment of stock-based compensation expense for RSUs with performance-based vesting conditions granted to our chief executive officer for which the underlying performance condition was deemed probable.

We also experienced decreases in salary and benefits, particularly in accrued bonuses, mostly attributable to the resignation of our chief financial officer in June 2021 and decreases in recruitment expenses due to hiring fewer employees during the three months ended June 30, 2021 compared to the same period in 2020.

Comparison of the Six Months Ended June 30, 2021 and 2020

General and administrative expenses were $6.7 million for the three months ended September 30, 2021 compared to $11.7 million for the same period in 2020.

General and administrative expenses consist of non-cash stock-based compensation expenses of $0.5 million for the three months ended September 30, 2021 and $3.3 million for the same period in 2020.

The decrease in stock-based compensation expense of $2.8 million was due to a decrease in the grant date fair value of recent option grants and a reversal of $0.9 million of previously recognized expense in the three months ended September 30, 2021 related to forfeited awards from a terminated executive officer.

We also experienced a decrease of $2.0 million in professional fees during the three months ended September 30, 2021 compared to the same period in 2020 mostly due to more amortization of incremental contract costs associated with entering into the BeiGene Agreement in 2020.

Comparison of the Nine Months Ended September 30, 2021 and 2020

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,

Nine Months Ended September 30,

Collaboration revenue

Collaboration revenue for the six months ended June 30, 2020 includes the recognition of deferred revenue and reimbursements incurred under the Allergan Agreement.

Following its acquisition of Allergan, AbbVie gave written notice of termination of the Allergan Agreement in June 2020 which became effective October 2020.

Collaboration revenue for the nine months ended September 30, 2021 consists of the recognition of deferred revenue allocated to 2158 under the BeiGene Agreement upon discontinuing development of 2158 .

Collaboration revenue

for the nine months ended September 30, 2020 consists of $31.0 million recognized for the transfer of the VBR License upon entering into the BeiGene Agreement.

It also consists of the remaining deferred revenue balance and reimbursements incurred under the Allergan Agreement of $47.1 million , for which AbbVie (formerly Allergan pre-acquisition) gave written notice of termination in June 2020.

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,

Nine Months Ended September 30,

Program/Description

HBV Cure program

Microbiome program

Total research and development expenses

Research and development expenses were $35.3 million for the six months ended June 30, 2021 compared to $46.4 million for the same period in 2020.

Research and development expenses were $53.8 million for the nine months ended September 30, 2021 compared to $73.3 million for the same period in 2020.

The decrease was due to a decrease of $24.1 million in research and development expenses related to the wind-down of the Microbiome program, including the reversal of $3.0 million of previously recognized stock-based compensation expense related to forfeited awards of terminated employees.

This decrease was partially offset by an increase of $4.7 million in research and development expenses related to the HBV program, which was primarily due to increases in clinical activities, chemistry and manufacturing control

activities to support our clinical studies and increased salary and benefits due to additional employees.

Research and development expenses include $ 1.3 million in a net reversal of non-cash stock-based compensation expense as a result of forfeited awards for the six months ended June 30, 2021 compared to $5.6 million of non-cash stock-based compensation expense for the same period in 2020 .

This decrease was partially offset by an increase of $4.5 million in research and development expenses related to the HBV program, which was primarily due to increases in clinical activities, chemistry and manufacturing control activities to support our clinical studies and increased salary and benefits due to additional employees.

Research and development expenses consist of $0.2 million in a net reversal of non-cash stock-based compensation expense as a result of forfeited awards for the nine months ended September 30, 2021 compared to $8.3 million of non-cash stock-based compensation expense for the same period in 2020.

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,

Nine Months Ended September 30,

General and administrative expenses

General and administrative expenses were $15.6 million for the six months ended June 30, 2021 compared to $18.2 million for the same period in 2020.

General and administrative expenses include non-cash stock-based compensation expenses of $3.0 million for the six months ended June 30, 2021 and $6.5 million for the same period in 2020.

The decrease in stock-based compensation expense of $3.5 million was due to a decrease in the grant date fair value of recent option grants and a reversal of $0.9 million of previously recognized expense in the six months ended June 30, 2021 related to forfeited awards from terminated employees.

Additionally, for the three months ended June 30, 2020, we recognized $0.7 million as a cumulative catch-up adjustment of stock-based compensation expense for RSUs with performance-based vesting conditions granted to our chief executive officer which the underlying performance condition was deemed probable.

This decrease in stock-based compensation expense was partially offset by an increase in lease-related costs largely attributable to asset impairment and other charges in connection with restructurings.

General and administrative expenses were $22.3 million for the nine months ended September 30, 2021 compared to $29.9 million for the same period in 2020.

General and administrative expenses consist of non-cash stock-based compensation expenses of $3.5 million for the nine months ended September 30, 2021 and $9.8 million for the same period in 2020.

The decrease in stock-based compensation expense of $6.3 million was due to a decrease in the grant date fair value of recent option grants and a reversal of $1.8 million of previously recognized expense in the nine months ended September 30, 2021 related to forfeited awards from terminated employees.

Additionally, for the nine months ended September 30, 2020, we recognized $0.7 million as a cumulative catch-up adjustment of stock-based compensation expense for RSUs with performance-based vesting conditions granted to an executive officer for which the underlying performance condition was deemed probable.

We also experienced a decrease of $2.0 million in professional fees during the nine months ended September 30, 2021 compared to the same period in 2020 due to the amortized incremental contract costs associated with entering into the BeiGene Agreement in 2020.

Liquidity and Capital Resources

Sources of Liquidity

With the exception of the net income reported during the three months ended June 30, 2020 related to the recognition of deferred revenue from the termination of the collaboration agreement with AbbVie, we have not been profitable and have generated operating losses since we were incorporated in October 2005 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 funded our operations through June 30, 2021 principally through equity financings, raising an aggregate of $592.0 million in net proceeds, and strategic collaborations, raising an aggregate of $90.0 million through upfront payments.

Cash Flows for the Six Months Ended June 30, 2021 and 2020

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 September 30, 2021 principally through equity financings, raising an aggregate of $602.0 million in net proceeds, and strategic collaborations, raising an aggregate of $90.0 million through upfront payments.

Cash Flows for the Nine Months Ended September 30, 2021 and 2020

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

Six Months Ended June 30,

Nine Months Ended September 30,

Cash provided by (used in):

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Net Cash from Operating Activities

Net cash used in operating activities was $55.2 million for the six months ended June 30, 2021.

Net cash used in operating activities was $74.0 million for the nine months ended September 30, 2021.

This was primarily due to a $69.6 million net loss and a decrease of $13.0 million of operating assets and liabilities.

These decreases were partially offset by $2.0 million of amortization of operating lease right-of-use (ROU) assets, $0.2 million accretion of discount of marketable securities, $1.7 million of non-cash stock-based compensation expense, $0.2 million of depreciation and amortization expense and a $1.6 million loss on the sale of purchased leased equipment in connection with the wind-down of the Microbiome program.

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 amortization 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.

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

These decreases were partially offset by $2.9 million of amortization of operating lease right-of-use (ROU) assets, a $3.3 million of non-cash stock-based compensation expense, a $1.6 million loss on the sale of purchased leased equipment in connection with the wind-down of the Microbiome program and $0.4 million amortization of discount of marketable securities.

Net cash used in operating activities was $37.7 million for the nine months ended September 30, 2020.

This was primarily due to a $22.7 million net loss and a decrease of $36.8 million of operating assets and liabilities, which consists of the recognition of the remaining deferred revenue balance of $36.0 million as revenue during the nine months ended September 30, 2020 in connection with AbbVie’s decision to terminate the Allergan Agreement.

These decreases were partially offset by $18.1 million of non-cash stock-based compensation expense, $3.5 million of amortization of operating lease ROU assets and $0.4 million of depreciation and amortization expense.

Net Cash from Investing Activities

Net cash provided by investing activities for the six months ended June 30, 2021 was $14.9 million due to $99.0 million of redemptions of marketable securities and $3.0 million of sale of marketable securities, which were partially offset by the purchase of $84.8 million of marketable securities.

Net cash provided by investing activities for the nine months ended September 30, 2021 was $35.0 million due to $132.2 million of redemptions of marketable securities and $12.5 million in proceeds from the sale of marketable securities, which were partially offset by the purchase of $107.5 million of marketable securities.

Additionally, we purchased leased equipment for $3.1 million that we sold for $0.9 million in connection with the wind-down of the Microbiome program.

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 nine months ended September 30, 2020 was $47.4 million due to $165.3 million of redemptions of marketable securities and $35.6 million in proceeds from the sale of marketable securities, which were partially offset by the purchase of $153.0 million of marketable securities and $0.5 million of property and equipment.

Net Cash from Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2021 was $40.3 million resulting from the sale of 7.4 million shares of our common stock through “at-the-market” offerings, net of commissions and fees.

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 issuance of 42,266 shares of common stock under our ESPP.

Net cash provided by financing activities for the nine months ended September 30, 2021 was $50.4 million resulting from the sale of 10.4 million shares of our common stock through “at-the-market” offerings, net of commissions and fees.

Net cash provided by financing activities for the nine months ended September 30, 2020 was $1.9 million resulting from the exercise of stock options to purchase 172,779 shares of common stock and issuance of 42,266 shares of common stock under the Assembly Biosciences, Inc.

2018 Employee Stock Purchase Plan.

Funding Requirements

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We monitor our cash needs and the status of the capital markets on a continuous basis.

From time to time, we opportunistically raise capital and have done so numerous times since our initial public offering by issuing equity securities, most recently in June 2021.

From time to time, we opportunistically raise capital and have done so numerous times since our initial public offering by issuing equity securities, most recently in September 2021.

We expect to continue to raise capital when and as needed and at the time and in the manner most advantageous to us.

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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