What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-11 · 157 added, 127 removed, 576 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

March 31, 2023

June 30, 2023

December 31, 2022

19 unchanged sentences

Stockholders’

Common stock, $ 0.00001 par value, 150,000,000 authorized at March 31, 2023 and December 31, 2022, and 37,800,102 and 37,771,918 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

Common stock, $ 0.00001 par value, 150,000,000 authorized at June 30, 2023 and December 31, 2022, and 38,086,606 and 37,771,918 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Operating Expenses:

5 unchanged sentences

Interest income, including amortization and accretion income

Loss on disposal of assets

Other income (expense)

Total other income (expense)

Total other income

Net loss per common share—basic and diluted

2 unchanged sentences

Other comprehensive items:

Unrealized gain (loss) on marketable securities

Total other comprehensive gain (loss)

Unrealized loss on marketable securities

Total other comprehensive loss

Total comprehensive loss

7 unchanged sentences

Stock-based compensation expense

Employee Stock Purchase Plan Issuance

Stock option exercises

Unrealized loss on marketable securities

Unrealized gain on marketable securities

Balance, March 31, 2023

Stock-based compensation expense

Issuance of common stock under ATM facility

Stock option exercises

Unrealized loss on marketable securities

Balance, June 30, 2023

Other Comprehensive

2 unchanged sentences

Stock-based compensation expense

Employee Stock Purchase Plan Issuance

Stock option exercises

Unrealized gain on marketable securities

Unrealized loss on marketable securities

Balance, March 31, 2022

Stock-based compensation expense

Stock option exercises

Unrealized loss on marketable securities

Balance, June 30, 2022

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

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

1 unchanged sentence

Depreciation expense

Stock-based compensation expense

Accretion on marketable securities

Loss on disposal of property and equipment

Stock-based compensation expense

Non-cash lease expense

Changes in operating assets and liabilities:

3 unchanged sentences

Accrued expenses and other liabilities

Operating lease liabilities

Net cash used in operating activities

2 unchanged sentences

Purchase of marketable securities

Maturities and proceeds from the sale of marketable securities

Maturities of marketable securities

Net cash used in investing activities

1 unchanged sentence

Proceeds from exercise of stock options

Proceeds from issuance of common stock under ATM facility, net of issuance costs

Proceeds from ESPP purchase

Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

2 unchanged sentences

Purchases of property and equipment in accounts payable and accrued expenses and other liabilities

Common stock issued under ATM settled in future period

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that sum to the total of the same such amounts shown in the unaudited condensed consolidated statements of cash flows (in thousands):

12 unchanged sentences

Within these consolidated financial statements, unless the context otherwise requires, references to the Company or Aura refer to Aura Biosciences, Inc.

and its subsidiary on a consolidated basis.

and its subsidiaries on a consolidated basis.

The Company’s initial focus is on ocular and urologic oncology where the disease is diagnosed early and there is a high unmet medical need for targeted local therapies.

6 unchanged sentences

The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, the successful development and commercialization of products, fluctuations in operating results and financial risks, need for additional financing or alternative means of financial support or both to fund its current operating plan, protection of proprietary technology and patent risks, compliance with government regulations, dependence on key personnel and collaborative partners, competition, customer demand, management of growth, and the effectiveness of marketing by the Company.

Initial Public Offering

On November 2, 2021, the Company completed its initial public offering, or the IPO, in which it issued and sold 6,210,000 shares of common stock, including the full exercise of the underwriters’

option to purchase additional shares at a price to the public of $ 14.00 per share for aggregate gross proceeds of $ 86.9 million.

The Company received approximately $ 78.3 million in net proceeds after deducting underwriting discounts, commissions and offering expenses.

Through March 31, 2023, the Company has funded its operations primarily with proceeds from the initial and additional closings of its convertible preferred stock financings, and through its IPO, follow-on offering and at-the-market offering, or ATM transaction.

Through June 30, 2023 , the Company has funded its operations primarily with proceeds from the initial and additional closings of its convertible preferred stock financings, and through its IPO, follow-on offering and at-the-market offering, or ATM.

On December 5, 2022, the Company issued and sold 7,705,000 shares of common stock, including the full exercise of the underwriters’

3 unchanged sentences

The Company also simultaneously entered into the Open Market Sale Agreement SM , or Sales Agreement, with Jefferies LLC, or the Sales Agent, to provide for the offering, issuance and sale by the Company of up to an aggregate of $ 75.0 million of common stock from time to time in the ATM under the 2022 Shelf and subject to the limitations thereof.

The Company issued 732,189 shares of common stock at an average price of $ 12.51 for aggregate gross proceeds of $ 9.2 million as of December 31, 2022 under the ATM, and issued no common stock for the three months ended March 31, 2023.

The Company issued 169,200 shares of common stock at an average price of $ 12.58 for aggregate gross proceeds of $ 2.1 million during the six months ended June 30, 2023 under the ATM.

In addition, t he Company issued 732,189 shares of common stock at an average price of $ 12.51 for aggregate gross proceeds of $ 9.2 million as of December 31, 2022 under the ATM.

On November 2, 2021, the Company completed its IPO, in which it issued and sold 6,210,000 shares of common stock, including the full exercise of the underwriters’

1 unchanged sentence

The Company received approximately $ 78.3 million in net proceeds after deducting underwriting discounts, commissions and offering expenses.

The Company has incurred recurring losses and negative operating cash flows from operations since its inception, including net losses of $ 17.5 million and $ 12.8 million for the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, the Company had cash and cash equivalents and marketable securities of $ 173.5 million and an accumulated deficit of $ 228.4 million.

The Company has incurred recurring losses and negative operating cash flows from operations since its inception, including net losses of $ 35.8 million and $ 26.3 million for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, the Company had cash and cash equivalents and marketable securities of $ 162.0 million and an accumulated deficit of $ 246.7 million.

The Company expects to continue to generate operating losses for the foreseeable future.

As of the issuance date of these unaudited condensed consolidated financial statements for the three months ended March 31, 2023 , the Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance of these consolidated financial statements.

As of the issuance date of these unaudited condensed consolidated financial statements for the three and six months ended June 30, 2023 , the Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance of these consolidated financial statements.

The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

3 unchanged sentences

In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations, and cash flows.

The financial data and other information disclosed in these notes related to the three months ended March 31, 2023 and 2022 are also unaudited.

The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2023 and 2022 are also unaudited.

The unaudited condensed results of operations are not necessarily indicative of the operating results that may occur for the full fiscal year ending December 31, 2023 .

17 unchanged sentences

The standard will apply as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.

The Company adopted the standard on January 1, 2023 and did not have a material impact on its results of operations, financial condition, and financial statement disclosures.

The Company adopted the standard on January 1, 2023 and it did not have a material impact on its results of operations, financial condition, and financial statement disclosures.

Fair Value of Assets and Liabilities

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of March 31, 2023 and December 31, 2022 (in thousands):

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of June 30, 2023 and December 31, 2022 (in thousands):

Quoted prices

20 unchanged sentences

Government agencies

Asset-backed securities

Total financial assets

5 unchanged sentences

Property and equipment, net

Depreciation expense was $ 0.3 million and $ 0.3 million for the three months ended March 31, 2023 and 2022 , respectively.

Depreciation expense was $ 0.3 million and $ 0.3 million for the three months ended June 30, 2023 and 2022, respectively.

In addition, depreciation expense was $ 0.6 million and $ 0.6 million for the six months ended June 30, 2023 and 2022 , respectively.

Prepaid Expenses and Other Current Assets

5 unchanged sentences

Marketable securities consist of the following (in thousands):

March 31, 2023

June 30, 2023

Amortized Cost

12 unchanged sentences

Government agencies

Asset-backed securities

As of March 31, 2023, the unrealized losses on the Company’s investments in U.S.

government agencies securities and corporate bonds were caused by interest rate increases.

As of June 30, 2023, the unrealized losses on the Company’s investments in commercial paper, corporate bonds, U.S.

government agencies securities, Yankee bonds, and asset-backed securities were caused by interest rate increases.

The current credit ratings are all within the guidelines of the investment policy of the Company and the Company does not expect the issuers to settle any security at a price less than the amortized cost basis of the investment.

The Company does not intend to sell the investments and it is not probable that the Company will be required to sell the investments before recovery of their amortized cost basis.

As of March 31, 2023, 18 marketable securities with contractual maturities of one year or less were in a unrealized loss position totaling $ 0.1 million.

As of March 31, 2023, all marketable securities held by the Company had remaining contractual maturities of one year or less.

There were no impairments of the Company’s assets measured and carried at fair value dur ing the three months ended March 31, 2023 .

As of June 30, 2023, 41 marketable securities with contractual maturities of one year or less were in an unrealized loss position totaling $ 0.2 million.

As of June 30, 2023, all marketable securities held by the Company had remaining contractual maturities of one year or less.

There were no impairments of the Company’s assets measured and carried at fair value dur ing the six months ended June 30, 2023 .

Accrued Expenses and Other Current Liabilities

3 unchanged sentences

Accrued expenses and other current liabilities

The Company had 150,000,000 authorized shares of common stock, par value $ 0.00001 per share, of which 37,800,102 and 37,771,918 shares were issued and outstanding at March 31, 2023 and December 31, 2022, respectively.

Upon closing of the IPO on November 2, 2021, all of the Company’s outstanding shares of convertible preferred stock automatically converted into 22,550,561 shares of common stock.

In addition, the Company authorized 10,000,000 shares of preferred stock, par value $ 0.00001 per share, all of which shares of preferred stock will be undesignated.

The Company had 150,000,000 authorized shares of common stock, par value $ 0.00001 per share, of which 38,086,606 and 37,771,918 shares were issued and outstanding at June 30, 2023 and December 31, 2022, respectively.

In addition, the Company had 10,000,000 authorized shares of preferred stock, par value $ 0.00001 per share, all of which shares of preferred stock will be undesignated.

No authorized shares of preferred stock were issued and outstanding at June 30, 2023 and December 31, 2022.

On December 5, 2022, the Company issued and sold 7,705,000 shares of common stock, including the full exercise of the underwriters’

3 unchanged sentences

The Company also simultaneously entered into the Sales Agreement with the Sales Agent to provide for the offering, issuance and sale by the Company of up to an aggregate of $ 75.0 million of common stock from time to time in the ATM under the 2022 Shelf and subject to the limitations thereof.

The Company issued 169,200 shares of common stock at an average price of $ 12.58 for aggregate gross proceeds of $ 2.1 million during the six months ended June 30, 2023 under the ATM.

In addition, the Company issued 732,189 shares of common stock at an average price of $ 12.51 for aggregate gross proceeds of $ 9.2 million as of December 31, 2022 under the ATM .

Stock-Based Compensation

17 unchanged sentences

The purchase price of the shares under the ESPP are at 85 % of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the purchase date.

As of March 31, 2023, 955,915 shares were available to be issued under the ESPP.

The Company recognized $ 0.02 million share-based compensation expense related to the ESPP for the three months ended March 31, 2023.

As of June 30, 2023, 955,915 shares were available to be issued under the ESPP.

The Company recognized $ 0.03 million share-based compensation expense related to the ESPP for the six months ended June 30, 2023.

The Company recognized $ 0.02 million share-based compensation expense related to the ESPP for the three months ended June 30, 2023.

Stock Options

With the transfer of the available options from the 2018 Plan to the 2021 Plan, there were 4,254,417 options and restricted stock units available for grant under the 2021 Plan at March 31, 2023.

With the transfer of the available options from the 2018 Plan to the 2021 Plan, there were 4,324,297 options and restricted stock units available for grant under the 2021 Plan at June 30, 2023.

The Board is authorized to administer the 2021 Plan.

8 unchanged sentences

The Board or any committee to which the Board delegates authority may, with the consent of the affected plan participants, re-price or otherwise amend outstanding awards consistent with the terms of the 2021 Plan.

The following table summarizes stock option activity under the 2018 Plan and 2021 Plan for the three months ended March 31, 2023:

The following table summarizes stock option activity under the 2018 Plan and 2021 Plan for the six months ended June 30, 2023:

Aggregate Intrinsic

2 unchanged sentences

Cancelled/Forfeited

Outstanding at March 31, 2023

Exercisable at March 31, 2023

The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2023 and 2022 was $ 7.52 and $ 11.98 per share, respectively.

The fair value of options vested during the three months ended March 31, 2023 and 2022 was $ 1.2 million and $ 0.6 million, respectively.

The total intrinsic value of options exercised was $ 0.1 million and $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively.

The fair value of the stock options issued for the three months ended March 31, 2023 and 2022 was measured with the following weighted-average assumptions:

Outstanding at June 30, 2023

Exercisable at June 30, 2023

The weighted-average grant date fair value of stock options granted during the six months ended June 30, 2023 and 2022 was $ 7.66 and $ 11.56 per share, respectively.

The fair value of options vested during the six months ended June 30, 2023 and 2022 was $ 3.4 million and $ 1.2 million, respectively.

The total intrinsic value of options exercised was $ 0.9 million and $ 0.6 million for the six months ended June 30, 2023 and 2022, respectively.

The fair value of the stock options issued for the three and six months ended June 30, 2023 and 2022 was measured with the following weighted-average assumptions:

Three Months Ended

Six Months Ended

Risk-free interest rate

5 unchanged sentences

Unvested shares of restricted common stock may not be sold or transferred by the holder.

A summary of the restricted stock units activity during the three months ended March 31, 2023 is as follows:

A summary of the restricted stock units activity during the six months ended June 30, 2023 is as follows:

Restricted Stock Units

2 unchanged sentences

Vested/Released

Unvested at March 31, 2023

Unvested at June 30, 2023

As a result of the 2021 Equity Incentive Plan, the Company granted restricted stock units which vest in increments of 25 % annually over a period of four years .

During the three months ended March 31, 2023, no restricted stock units vested.

No restricted stock units vested during the six months ended June 30, 2023.

Stock-based Compensation Expense

1 unchanged sentence

Three Months Ended

Six Months Ended

Research and development

General and administrative

As of March 31, 2023 , there was $ 16.4 million of unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.62 years.

As of March 31, 2023 , there was $ 5.8 million of unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted-average period of 3.45 years.

As of June 30, 2023, there was $ 14.2 million of unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.5 years.

As of June 30, 2023, there was $ 6.0 million of unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted-average period of 3.14 years.

Common Stock Warrants

3 unchanged sentences

A total of 173,827 of the Series B Warrants were outstanding and were converted into warrants to purchase 12,686 shares of common stock with an exercise price of $ 17.03 upon the completion of the IPO in November 2021.

As a result, the 12,686 common stock warrants were converted into equity instruments and remain outstanding as of March 31, 2023.

As a result, the 12,686 common stock warrants were converted into equity instruments and remain outstanding as of June 30, 2023 .

In January 2012, the Company adopted the Aura Biosciences 401(k) Profit Sharing Plan and Trust (the “401(k) Plan”) for its employees, which is designed to be qualified under Section 401(k) of the Internal Revenue Code.

1 unchanged sentence

The Company makes matching contributions of 100 % of the first 6 % of employee contributions.

The Company made matching contributions in the amount of $ 0.2 m illion and $ 0.1 million for the three months ended March 31, 2023 and 2022 , respectively.

The Company made matching contributions in the amount of $ 0.2 million and $ 0.1 million for the three months ended June 30, 2023 and 2022 , respectively.

The Company made matching contributions in the amount of $ 0.4 million and $ 0.3 million for the six months ended June 30, 2023 and 2022 , respectively.

Commitments and Contingencies

1 unchanged sentence

The Company has historically entered into lease arrangements for its facilities.

The Company has one operating lease for its office and laboratory facility with required future minimum payments as of March 31, 2023 and one operating lease that was terminated in August 2022.

The Company has one operating lease for its office and laboratory facility with required future minimum payments as of June 30, 2023 and one operating lease that was terminated in August 2022.

On May 16, 2022, the Company entered into an office and laboratory lease in Boston, MA with an initial 10-year term and one renewal option to extend the lease for an additional seven years .

2 unchanged sentences

The landlord will reimburse the Company up to $ 0.5 million for certain costs related to expansion of the laboratory space.

As of March 31, 2023, the Company has incurred $ 0.1 million of expenses related to the expansion.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s leases for the three months ended March 31, 2023 and 2022 (in thousands):

As of June 30, 2023, the Company has incurred $ 0.1 million of expenses related to the expansion, and has been reimbursed for $ 0.1 million of these expenses.

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s leases for the three and six months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended

Six Months Ended

Operating lease costs

5 unchanged sentences

Weighted-average discount rate—operating leases

The following table reconciles the future minimum commitments to the Company’s operating lease liabilities at March 31, 2023 (in thousands):

Operating lease payments as of March 31, 2023

The following table reconciles the future minimum commitments to the Company’s operating lease liabilities at June 30, 2023 (in thousands):

Operating lease payments as of June 30, 2023

Total lease payments

Total operating lease liabilities at March 31, 2023

Total operating lease liabilities at June 30, 2023

current portion of lease liabilities

8 unchanged sentences

The term of the LI-COR Exclusive Agreement expires on a country-by-country basis, until the longer of (i) ten years from the first commercial sale of a licensed product in such country and (ii) the last to expire valid claim in such country.

The Company recognized no expenses related to this agreement and related amendments for the three months ended March 31, 2023 and 2022, respectively.

The Company recognized no expenses related to this agreement and related amendments for the six months ended June 30, 2023 and 2022, respectively.

LI-COR Non-Exclusive License and Supply Agreement

5 unchanged sentences

The 2014 Non-Exclusive Agreement also required the Company to make certain payments upon the achievement of specified development and commercial milestones of up to $ 0.4 million in aggregate.

During the three months ended March 31, 2023 and 2022 , the Company recognized no milestones related to this agreement.

During the six months ended June 30, 2023 and 2022, the Company recognized no milestones related to this agreement.

Life Technologies Corporation

6 unchanged sentences

The cost of this amendment was a one-time fee of $ 0.05 million.

During the three months ended March 31, 2023 and 2022, the Company recognized $ nil million and $ 0.05 million of expenses related to this agreement, respectively.

During the six months ended June 30, 2023 and 2022 , the Company recognized $ 0 million and $ 0.05 million of expenses related to this agreement, respectively.

Effective in September 2022, the Company entered into a new non-exclusive, perpetual license agreement with Life Technologies for licensed products.

2 unchanged sentences

In the event of a change of control, there will be a change of control fee of $ 0.5 million.

During the three months ended March 31, 2023, the Company recognized $ nil million of expenses related to this agreement.

During the six months ended June 30, 2023 , the Company recognized no expenses related to this agreement.

National Institute of Health (NIH)-Collaboration Research and Development Agreement

4 unchanged sentences

This agreement was first amended in 2012, 2013, 2014, 2015, 2016, 2018 and most recently in September of 2020.

During the three months ended March 31, 2023 and 2022 , the Company paid $ nil million and $ nil million of research collaboration fees related to this agreement.

During the six months ended June 30, 2023 and 2022, the Company paid no research collaboration fees related to this agreement.

A seventh amendment was made in October 2020, requiring payment of $ 0.04 million within 30 days of October 1, 2020, and another $ 0.03 million within 30 days of the 10th anniversary of the CRADA, which was paid in July 2021.

This seventh amendment extended the term of the CRADA to September 30, 2022.

The Company recognized no milestones related to this agreement and related amendments for the three months ended March 31, 2023 and 2022.

The Company recognized no milestones related to this agreement and related amendments for the six months ended June 30, 2023 and 2022.

An eighth amendment was effective in September 2022, requiring payment of $ 0.04 million within 30 days of November 1, 2022, and payment of another $ 0.03 million within 30 days of the 12th anniversary of the CRADA, which will be in August 2023.

This eighth amendment extended the term of the CRADA to September 30, 2024.

During the three months ended March 31, 2023, the Company recognized $nil million of expenses related to this agreement

During the six months ended June 30, 2023 , the Company recognized no expenses related to this agreement

National Institute of Health (NIH)-Exclusive Patent License Agreement

4 unchanged sentences

Additionally, the Company’s payment obligations to the NIH are subject to an annual minimum royalty payment of low five figures.

The Company recognized no patent licensing fees for the three months ended March 31, 2023 and 2022, respectively.

The Company recognized no patent licensing fees for the six months ended June 30, 2023 and 2022, respectively.

In 2015, 2018 and 2019, the Company amended its exclusive patent license to include updates on the status of the commercial development and update/expand the list of licensed patents and patent applications.

5 unchanged sentences

0.01 million was accrued in 2016 and paid in 2017 by the Company.

The milestones for the successful Phase I, II and III clinical trials are based on receiving a final report and achieving the primary endpoints defined in that trial, and those milestones have not been achieved as of March 31, 2023.

Upon the sublicense by the Company of a product for which royalties are payable under the agreement, low- to mid-single-digit royalty payments would be due by the Company.

The non-milestone payments in this agreement are subject to an anti-stacking clause.

The Company did no t incur any expense in the three months ended March 31, 2023 and 2022.

The Company did no t incur any expense in the six months ended June 30, 2023 and 2022.

In July 2019, the Company entered into an exclusive license agreement with Clearside Biomedical, Inc., or Clearside, for the license of Clearside’s Suprachoroidal Microneedle Technology for use in the treatment of indeterminate lesions and choroidal tumors.

4 unchanged sentences

The Clearside License agreement expires on a country-by-country basis upon the later of the last to expire patent or ten years from the date of the first commercial sale of a product.

The Company recognized no expenses related to this agreement and related amendments for the three months ended March 31, 2023 and 2022 .

The Company recognized $ 0.4 million and $ 0 million in expense related to this agreement and related amendments for the six months ended June 30, 2023 and 2022 .

Net Loss Per Share

1 unchanged sentence

Diluted net loss per share is the same as basic net loss per share for the periods presented since the effects of potentially dilutive securities are antidilutive given the net loss of the Company.

The Company has calculated basic and diluted net loss per share for the three months ended March 31, 2023 and 2022 as follows (in thousands, except share and per share data):

The Company has calculated basic and diluted net loss per share for the three and six months ended June 30, 2023 and 2022 as follows (in thousands, except share and per share data):

Three Months Ended

Six Months Ended

Weighted-average common stock outstanding—basic and diluted

1 unchanged sentence

The following potentially dilutive securities were excluded from the computation of the diluted net loss per share for the periods presented because their effect would have been antidilutive:

Three Months Ended

Six Months Ended

Stock options to purchase common stock

2 unchanged sentences

Total potential dilutive shares

The Company estimates an annual effective tax rate of 0 % for the year ending December 31, 2023 as the Company incurred losses for the three months ended March 31, 2023, and is forecasting additional losses through the remainder of fiscal year ending December 31, 2023, resulting in an estimated net loss for both financial statement and tax purposes for the year ending December 31, 2023.

The Company estimates an annual effective tax rate of 0 % for the year ending December 31, 2023 as the Company incurred losses for the six months ended June 30, 2023, and is forecasting additional losses through the remainder of fiscal year ending December 31, 2023, resulting in an estimated net loss for both financial statement and tax purposes for the year ending December 31, 2023.

Therefore, no federal or state income taxes are expected and none have been recorded at this time.

2 unchanged sentences

Accordingly, the deferred tax assets have been reduced by a full valuation allowance, since the Company does not currently believe that realization of its deferred tax assets is more likely than not.

As of March 31, 2023 , the Company had no unrecognized income tax benefits that would reduce the Company’s effective tax rate if recognized.

As of June 30, 2023 , the Company had no unrecognized income tax benefits that would reduce the Company’s effective tax rate if recognized.

Subsequent Events

18 unchanged sentences

We are currently evaluating suprachoroidal, or SC, administration of bel-sar in a Phase 2 trial.

Enrollment is complete in the Phase 2 trial, and updated interim data of patients treated with the therapeutic regimen intended to be used in the Phase 3 trial is on track to be presented in the second half of 2023.

Enrollment is complete in the Phase 2 trial, and updated efficacy data with 12 months median follow up of patients treated with the therapeutic regimen intended to be used in the Phase 3 trial is on track to be presented in the second half of 2023.

In February 2023 we presented average nine-month interim safety and efficacy data from this ongoing trial at Macula Society’s Annual Meeting which demonstrated a favorable safety profile with no posterior inflammation and no treatment-related serious adverse events, or SAEs, reported as of January 10, 2023.

2 unchanged sentences

We have selected the SC route to conduct our global Phase 3 trial in alignment with regulatory agencies.

The Phase 3 clinical trial design incorporates guidance and feedback from the FDA following a recent Type C meeting.

The FDA recommended that the Phase 3 trial follow a standard three-arm randomized, controlled and masked design.

The trial is intended to enroll approximately 100 patients and it will be randomized 2:1:2 to receive investigational therapeutic regimen bel-sar, low dose regimen bel-sar or a sham control.

The primary efficacy analysis is planned to be a time to event composite endpoint that will compare the tumor control and visual acuity of the therapeutic regimen group to sham when the last patient meets 12 months of follow up.

We are currently conducting start up activities for the global Phase 3 trial with the goal to dose our first patient in the first half of 2023.

The Phase 3 clinical trial design incorporates guidance and feedback from the FDA following a Type C meeting.

The Phase 3 trial is designed as a superiority trial comparing belzupacap sarotalocan (bel-sar) versus sham.

The trial is a global Phase 3, randomized, multi-center, masked study, and it is intended to enroll approximately 100 patients randomized 2:1:2 to receive high dose regimen of bel-sar, low dose regimen of bel-sar with SC administration, or a sham control.

The primary endpoint is time to tumor progression and the first key secondary endpoint is a composite time to event analysis that will compare the tumor control and visual acuity of the bel-sar high-dose regimen to sham when the last patient completes their 12 months of follow up.

We are currently conducting start up activities for the global Phase 3 trial with the goal to dose our first patient in the second half of 2023.

We are also developing bel-sar for additional ocular oncology indications and have an open IND in the United States for choroidal metastasis, supporting the potential of bel-sar to provide a novel treatment option that preserves vision for these patients.

1 unchanged sentence

These patients are treated by the same ocular oncologists that treat choroidal melanoma and there are no drugs approved that can treat the lesion in the eye and preserve vision.

We received fast track designation from the FDA’s Division of Oncology and plan to initiate startup activities for the Phase 2 trial in this indication in the second half of 2023.

We received fast track designation from the FDA’s Division of Oncology and plan to initiate the Phase 2 trial in 2024.

In addition to our ocular oncology franchise, we are leveraging our targeted oncology platform to develop bel-sar in the field of urologic oncology with an initial indication for the treatment of non-muscle invasive bladder cancer, or NMIBC, where we received fast track designation by the FDA’s Division of Oncology.

We initiated enrollment in a Phase 1 trial and we plan to present initial data from this trial in the second half of 2023.

We initiated enrollment in a Phase 1 trial and we plan to present data from this trial in 2024.

We were incorporated as a Delaware corporation in 2009 and, as of August 1, 2022, our headquarters are located in Boston, Massachusetts.

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We have funded our operations primarily through the sale of convertible preferred stock, common stock, and warrants.

From inception through March 31, 2023, we have raised an aggregate of approximately $320.8 million of gross proceeds primarily from private placements of our equity and convertible preferred stock as well as through the issuance of our common stock.

From inception through June 30, 2023, we have raised an aggregate of approximately $323.5 million of gross proceeds primarily from private placements of our equity and convertible preferred stock as well as through the issuance of our common stock.

On December 5, 2022, we issued and sold 7,705,000 shares of common stock, including the full exercise of the underwriters’

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offerings, or the ATM, under the 2022 Shelf and subject to the limitations thereof.

We issued 732,189 shares of our common stock at an average price of $12.51 for aggregate gross proceeds of $9.2 million as of December 31, 2022 under the ATM, and issued no common stock for three months ended March 31, 2023.

We issued 169,200 shares of common stock at an average price of $12.58 for aggregate gross proceeds of $2.1 million during the six months ended June 30, 2023 under the ATM.

In addition, we issued 732,189 shares of common stock at an average price of $12.51 for aggregate gross proceeds of $9.2 million as of December 31, 2022 under the ATM.

In November 2021, we issued and sold 6,210,000 shares of our common stock, including the full exercise of the underwriters’

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Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and commercialization of one or more of our product candidates.

Our net losses were $17.5 million and $12.8 million for the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, we had an accumulated deficit of $228.4 million.

Our net losses were $35.8 million and $26.3 million for the six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, we had an accumulated deficit of $246.7 million.

In addition, our losses from operations may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

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If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of March 31, 2023, we had cash and cash equivalents and marketable securities of $173.5 million.

We believe that our existing cash and cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into 2025.

As of June 30, 2023, we had cash and cash equivalents and marketable securities of $162.0 million.

We believe that our existing cash and cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2025.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

See “—Liquidity and Capital Resources”

Impact of the COVID-19 Pandemic

We continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business, including how it may continue to impact our operations and the operations of our suppliers, vendors and business partners.

In addition, we have taken steps to minimize the current environment’s impact on our business and strategy, including devising contingency plans and securing additional resources from third-party service providers.

To date, we’ve only encountered minor delays in our manufacturing process due to a supply chain constraints.

Beyond the impact on our pipeline, the extent to which COVID-19 ultimately impacts our business, results of operations and financial condition will depend on future developments, which remain highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the emergence of new variants, new information that may emerge concerning the severity of COVID-19 or the effectiveness of actions taken to contain COVID-19 or treat its impact, including vaccination and booster shot campaigns, among others.

If we or any of the third parties with whom we engage, however, were to experience any additional shutdowns or other prolonged business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially or negatively affected, which could have a material adverse impact on our business, results of operations and financial condition.

Although to date, our business has not been materially impacted by COVID-19, it is possible that our clinical development timelines could be negatively affected by COVID-19, which could materially and adversely affect our business, financial condition and results of operations.

See Item 1A “Risk Factors”

of this Quarterly Report on Form 10-Q for a discussion of the potential adverse impact of the COVID-19 pandemic on our business, financial condition and results of operations.

Components of Our Results of Operations

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fees paid to consultants for services directly related to our product development and regulatory efforts;

expenses associated with conducting preclinical studies performed by ourselves, outside vendors or academic collaborators;

expenses associated with conducting preclinical studies and clinical trials performed by ourselves, outside vendors or academic collaborators;

expenses incurred under agreements with contract research organizations, or CROs, as well as consultants that conduct and provide supplies for our preclinical studies and clinical trials;

the cost of manufacturing bel-sar, including the potential cost of CMOs that manufacture product for use in our preclinical studies and clinical trials and perform analytical testing, scale-up and other services in connection with our development activities;

costs associated with preclinical activities and development activities;

costs associated with preclinical activities and clinical development activities;

costs associated with our intellectual property portfolio;

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We expense research and development costs as incurred.

Costs for external development activities are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors.

Costs for external research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors.

Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid or accrued research and development expenses.

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Other Income (Expense)

Our other income (expense) consists of accretion, interest income and realized losses on marketable securities, loss on disposal of fixed assets, and interest income on our invested cash balances.

Our other income (expense) consists of accretion, interest income and realized losses on marketable securities, and interest income on our invested cash balances.

Since our inception, we have not recorded any U.S.

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Results of Operations

Comparison of the Three Months Ended March 31, 2023 and 2022

The following table summarizes our results of operations for the three months ended March 31, 2023 and 2022:

Comparison of the Three Months Ended June 30, 2023 and 2022

The following table summarizes our results of operations for the three months ended June 30, 2023 and 2022:

Three Months Ended

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Interest income, including amortization of discount

Loss on disposal of assets

Other income (expense):

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Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended March 31, 2023 and 2022:

The following table summarizes our research and development expenses for the three months ended June 30, 2023 and 2022:

Three Months Ended

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Total research and development expenses

Research and development expenses increased to $14.4 million for the three months ended March 31, 2023 from $8.3 million for the three months ended March 31, 2022, primarily due to ongoing clinical costs associated with the progression of our phase 2 study and CRO costs associated with the start of our Phase 3 global trial, manufacturing and development costs for bel-sar, and higher personnel expenses from growing headcount.

Research and development expenses increased to $15.1 million for the three months ended June 30, 2023 from $9.5 million for the three months ended June 30, 2022, primarily due to ongoing clinical costs associated with the progression of our Phase 2 study and CRO costs associated with the start of our Phase 3 global trial, manufacturing and development costs for bel-sar, and higher personnel expenses from growing headcount.

General and Administrative Expenses

General and administrative expenses increased to $5.0 million for the three months ended March 31, 2023 from $4.5 million for the three months ended March 31, 2022, primarily driven by personnel expenses, as well as increases in general corporate expenses related to growth of the Company.

General and administrative expenses increased to $5.2 million for the three months ended June 30, 2023 from $4.3 million for the three months ended June 30, 2022, primarily driven by personnel expenses, as well as increases in general corporate expenses related to growth of the Company.

Comparison of the Six Months Ended June 30, 2023 and 2022

The following table summarizes our results of operations for the six months ended June 30, 2023 and 2022:

Six Months Ended

(in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest income, including amortization of discount

Other income (expense):

Total other income (expense)

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2023 and 2022:

Six Months Ended

(in thousands)

Clinical trials

Manufacturing development

Personnel/overhead expenses

Total research and development expenses

Research and development expenses increased to $29.5 million for the six months ended June 30, 2023 from $17.8 million for the six months ended June 30, 2022, primarily due to ongoing clinical costs associated with the progression of our Phase 2 study and CRO costs associated with the start of our Phase 3 global trial, manufacturing and development costs for bel-sar, and higher personnel expenses from growing headcount.

General and Administrative Expenses

General and administrative expenses increased to $10.2 million for the six months ended June 30, 2023 from $8.8 million for the six months ended June 30, 2022, primarily driven by personnel expenses, as well as increases in general corporate expenses related to growth of the Company.

Liquidity and Capital Resources

To date we have funded our operations primarily through the sale of convertible preferred stock, and common stock.

Through March 31, 2023, we have raised an aggregate of approximately $320.8 million of gross proceeds primarily from private placements of our equity and convertible preferred stock and warrants, as well as through the issuance of our common stock.

Through June 30, 2023, we have raised an aggregate of approximately $323.5 million of gross proceeds primarily from private placements of our equity and convertible preferred stock and warrants, as well as through the issuance of our common stock.

On December 5, 2022, we issued and sold 7,705,000 shares of common stock, including the full exercise of the underwriters’

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We also simultaneously entered into the Sales Agreement with the Sales Agent to provide for the offering, issuance and sale by us of up to an aggregate of $75.0 million of our common stock from time to time in the ATM under the 2022 Shelf and subject to the limitations thereof.

We issued 169,200 shares of common stock at an average price of $12.58 for aggregate gross proceeds of $2.1 million during the six months ended June 30, 2023 under the ATM.

In addition, we issued 732,189 shares of common stock at an average price of $12.51 for aggregate gross proceeds of $9.2 million as of December 31, 2022 under the ATM.

In November 2021, we issued and sold a total of 6,210,000 shares in our IPO of our common stock, including the full exercise of the underwriters’

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The following table summarizes our cash flows for each of the periods presented:

Three Months Ended

Six Months Ended

(in thousands)

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Net cash provided by financing activities

Net (decrease) increase in cash, cash equivalents, and restricted cash

Net decrease in cash, cash equivalents, and restricted cash

Operating Activities

During the three months ended March 31, 2023, net cash used in operating activities was $16.4 million, primarily due to our net loss of $17.5 million and a decrease in accounts payable related to timing of vendor invoicing and payments, partially offset by an increase in stock compensation expense.

During the three months ended March 31, 2022, net cash used in operating activities was $15.2 million, primarily due to our net loss of $12.8 million and decrease in accrued expenses and other liabilities related to less employee accrued compensation and clinical trial accruals, partially offset by the non-cash charge related to stock compensation expense.

During the six months ended June 30, 2023, net cash used in operating activities was $31.1 million primarily due to our net loss of $35.8 million and a decrease in accounts payable related to timing of vendor invoicing and payments, partially offset by an increase in stock compensation expense and prepaid expenses related to CRO costs associated with the start of our Phase 3 global trial.

During the six months ended June 30, 2022, net cash used in operating activities was $25.8 million, primarily due to our net loss of $26.3 million and decrease in accounts payable related to the timing of vendor invoicing and payments, partially offset by the non-cash charge related to stock compensation expense.

Investing Activities

Net cash used in investing activities during the three months ended March 31, 2023 was $66.9 million primarily due to purchases of marketable securities and property and equipment, partially offset by proceeds from sale and maturities of marketable securities.

Net cash used in investing activities during the three months ended March 31, 2022 was $25.5 million due to purchases of property and equipment and marketable securities

Net cash used in investing activities during the six months ended June 30, 2023 was $45.5 million primarily due to purchases of marketable securities and property and equipment, partially offset by proceeds from sale and maturities of marketable securities.

Net cash used in investing activities during the six months ended June 30, 2022 was $68.9 million primarily due to purchases of marketable securities and property and equipment, partially offset by maturities of marketable securities.

Financing Activities

During the three months ended March 31, 2023, net cash provided by financing activities was $0.2 million from proceeds from stock options exercises and ESPP purchases.

During the three months ended March 31, 2022, net cash provided by financing activities was $0.01 million from proceeds from stock options exercises.

During the six months ended June 30, 2023, net cash provided by financing activities was $2.7 million from proceeds from stock options exercises and issuance of common stock under the ATM.

During the six months ended June 30, 2022, net cash provided by financing activities was $0.3 million from proceeds from stock options exercises.

Funding Requirements

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our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payers;

addressing any potential interruptions or delays resulting from factors related to the COVID-19 pandemic;

the effect of competing technological and market developments;

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A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate.

As of March 31, 2023, we had cash and cash equivalents and marketable securities of $173.5 million.

Based on our research and development plans, we believe that our existing cash and cash equivalents, will be sufficient to fund our operations into 2025.

As of June 30, 2023, we had cash and cash equivalents and marketable securities of $162.0 million.

Based on our research and development plans, we believe that our existing cash and cash equivalents, will be sufficient to fund our operations into the second half of 2025.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

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Material Cash Requirements

The following table summarizes our contractual obligations and commitments as of March 31, 2023.

The following table summarizes our contractual obligations and commitments as of June 30, 2023.

Payments Due by Period

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Our actual results may differ from these estimates under different assumptions or conditions.

During the three months ended March 31, 2023, there were no material changes to our critical accounting policies from those described in the section titled “Management’s Discussion and Analysis of Financial Condition and Operations”

During the six months ended June 30, 2023, there were no material changes to our critical accounting policies from those described in the section titled “Management’s Discussion and Analysis of Financial Condition and Operations”

included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC.

Recent Accounting Pronouncements

We assessed the recent accounting pronouncements for the three months ended March 31, 2023 and determined no pronouncements have material impact to the condensed consolidated financial statements.

We assessed the recent accounting pronouncements for the six months ended June 30, 2023 and determined no pronouncements have material impact to the condensed consolidated financial statements.

Emerging Growth Company Status

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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 1. Financial Statements