What changed in this filing

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Item 1. Financial Statements

2023-11-09 compared with 2023-08-09 · 183 added, 125 removed, 608 unchanged (34% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

June 30, 2023

September 30, 2023

December 31, 2022

19 unchanged sentences

Stockholders’

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

Common stock, $ 0.00001 par value, 150,000,000 authorized at September 30, 2023 and December 31, 2022, and 38,216,717 and 37,771,918 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating Expenses:

11 unchanged sentences

Other comprehensive items:

Unrealized loss on marketable securities

Total other comprehensive loss

Unrealized gain (loss) on marketable securities

Total other comprehensive income (loss)

Total comprehensive loss

16 unchanged sentences

Balance, June 30, 2023

Stock-based compensation expense

Employee Stock Purchase Plan Issuance

Issuance of common stock under ATM facility

Stock option exercises

Unrealized gain on marketable securities

Balance, September 30, 2023

Other Comprehensive

9 unchanged sentences

Balance, June 30, 2022

Stock-based compensation expense

Stock option exercises

Unrealized loss on marketable securities

Balance, September 30, 2022

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

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

3 unchanged sentences

Stock-based compensation expense

(Loss) gain on disposal of property and equipment

Non-cash lease expense

9 unchanged sentences

Purchase of marketable securities

Proceeds from sale of marketable securities

Maturities of marketable securities

10 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

Initial measurement of right-of-use assets and lease liabilities

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):

September 30,

Cash and cash equivalents, end of period

13 unchanged sentences

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.

The Company’s proprietary platform enables the targeting of a broad range of solid tumors using Virus-Like Particles, or VLPs, that can be conjugated with drugs or loaded with nucleic acids to create Virus-Like Drug Conjugates, or VDCs.

The Company’s proprietary platform is designed to enable the targeting of a broad range of solid tumors using Virus-Like Particles, or VLPs, that can be conjugated with drugs or loaded with nucleic acids to create Virus-Like Drug Conjugates, or VDCs.

The Company’s VDCs are largely agnostic to tumor type and can recognize a subset of modified tumor associated glycosaminoglycans that are part of the heparan sulphate chain of HSPGs expressed on the cell surface of many tumor cells and in the tumor microenvironment.

4 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.

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.

Through September 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 November 9, 2023, the Company issued and sold 11,000,000 shares of common stock at a price to the public of $ 9.00 per share for aggregate gross proceeds of $ 99.0 million, or the 2023 Follow-On Offering.

The Company received approximately $ 92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and estimated offering expenses.

In addition, the Company has granted the underwriters a 30-day option to purchase up to 1,650,000 additional shares of common stock at a price of $ 8.46 per share.

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 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.

The Company issued 261,807 shares of common stock at an average price of $ 12.49 for aggregate gross proceeds of $ 3.3 million during the nine months ended September 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’

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.

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.

In connection with the 2023 Follow-On Offering, on November 6, 2023, the Company delivered written notice to Jefferies that the Company was suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement.

As a result, the Company will not make any sales of its securities pursuant to the Sales Agreement, unless and until a new prospectus, prospectus supplement, or a new registration statement relating to the shares eligible to be sold in the ATM is filed.

Other than the termination of the prospectus, the Sales Agreement remains in full force and effect.

The Company has incurred recurring losses and negative operating cash flows from operations since its inception, including net losses of $ 54.3 million and $ 42.2 million for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, the Company had cash and cash equivalents and marketable securities of $ 149.1 million and an accumulated deficit of $ 265.2 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 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.

As of the issuance date of these unaudited condensed consolidated financial statements for the three and nine months ended September 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 and six months ended June 30, 2023 and 2022 are also unaudited.

The financial data and other information disclosed in these notes related to the three and nine months ended September 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 it 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 no t 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 June 30, 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 September 30, 2023 and December 31, 2022 (in thousands):

September 30,

Quoted prices

23 unchanged sentences

Property and equipment, net, consisted of the following (in thousands):

September 30,

Assets under construction

2 unchanged sentences

Property and equipment, net

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.

Depreciation expense was $ 0.4 million and $ 0.3 million for the three months ended September 30, 2023 and 2022, respectively.

In addition, depreciation expense was $ 1.0 million and $ 0.9 million for the nine months ended September 30, 2023 and 2022 , respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

September 30,

Prepaid insurance

3 unchanged sentences

Marketable securities consist of the following (in thousands):

June 30, 2023

September 30, 2023

Amortized Cost

12 unchanged sentences

Government agencies

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

As of September 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.

1 unchanged sentence

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 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 .

As of September 30, 2023, 34 marketable securities with contractual maturities of one year or less were in an unrealized loss position totaling $ 0.1 million.

As of September 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 nine months ended September 30, 2023 .

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

September 30,

Accrued research and development expenses

1 unchanged sentence

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 38,086,606 and 37,771,918 shares were issued and outstanding at June 30, 2023 and December 31, 2022, respectively.

The Company had 150,000,000 authorized shares of common stock, par value $ 0.00001 per share, of which 38,216,717 and 37,771,918 shares were issued and outstanding at September 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.

No authorized shares of preferred stock were issued and outstanding at September 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.

The Company issued 261,807 shares of common stock at an average price of $ 12.49 for aggregate gross proceeds of $ 3.3 million during the nine months ended September 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 .

18 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 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.

As of September 30, 2023, 947,639 shares were available to be issued under the ESPP.

The Company recognized $ 0.10 million share-based compensation expense related to the ESPP for the nine months ended September 30, 2023.

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

Stock Options

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.

With the transfer of the available options from the 2018 Plan to the 2021 Plan, there were 3,981,056 options and restricted stock units available for grant under the 2021 Plan at September 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 six months ended June 30, 2023:

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

Aggregate Intrinsic

2 unchanged sentences

Cancelled/Forfeited

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:

Outstanding at September 30, 2023

Exercisable at September 30, 2023

The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2023 and 2022 was $ 7.81 and $ 11.09 per share, respectively.

The fair value of options vested during the nine months ended September 30, 2023 and 2022 was $ 4.8 million and $ 2.1 million, respectively.

The total intrinsic value of options exercised was $ 1.0 million and $ 0.8 million for the nine months ended September 30, 2023 and 2022, respectively.

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

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

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 six months ended June 30, 2023 is as follows:

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

Restricted Stock Units

2 unchanged sentences

Vested/Released

Unvested at June 30, 2023

Unvested at September 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 .

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

No restricted stock units vested during the nine months ended September 30, 2023.

Stock-based Compensation Expense

1 unchanged sentence

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

General and administrative

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.

As of September 30, 2023, there was $ 14.3 million of unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.44 years.

As of September 30, 2023, there was $ 7.8 million of unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted-average period of 3.04 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 June 30, 2023 .

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

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

The Company made matching contributions in the amount of $ 0.6 million and $ 0.4 million for the nine months ended September 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 June 30, 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 September 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 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):

As of September 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 nine months ended September 30, 2023 and 2022 (in thousands):

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

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 June 30, 2023 (in thousands):

Operating lease payments as of June 30, 2023

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

Operating lease payments as of September 30, 2023

Total lease payments

Total operating lease liabilities at June 30, 2023

Total lease liabilities at September 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 six months ended June 30, 2023 and 2022, respectively.

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

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

During the nine months ended September 30, 2023 and 2022 , the Company recognized $ 0.1 million and $ 0.1 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 six months ended June 30, 2023 , the Company recognized no expenses related to this agreement.

During the nine months ended September 30, 2023 , and 2022, the Company recognized $ 0 million and $ 0.4 million of 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 six months ended June 30, 2023 and 2022, the Company paid no research collaboration fees related to this agreement.

During the nine months ended September 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 six months ended June 30, 2023 and 2022.

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

During the nine months ended September 30, 2023 and 2022, the Company recognized $ 0.1 million and $ 0.04 million of 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 six months ended June 30, 2023 and 2022, respectively.

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

The Company did no t incur any expense in the nine months ended September 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 $ 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 .

The Company recognized $ 0.4 million and $ 0 million in expense related to this agreement and related amendments for the nine months ended September 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 and six months ended June 30, 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 nine months ended September 30, 2023 and 2022 as follows (in thousands, except share and per share data):

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

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:

Six Months Ended

Nine Months Ended

September 30,

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 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.

The Company estimates an annual effective tax rate of 0 % for the year ending December 31, 2023 as the Company incurred losses for the nine months ended September 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 June 30, 2023 , the Company had no unrecognized income tax benefits that would reduce the Company’s effective tax rate if recognized.

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

Subsequent Events

Subsequent events have been evaluated through the date of filing of the unaudited condensed consolidated financial statements.

The Company has not identified any subsequent events that require disclosure.

The Company has identified the following subsequent events that require disclosure:

2023 Following-On Offering

On November 9, 2023, the Company issued and sold 11,000,000 shares of common stock at a price to the public of $ 9.00 per share for aggregate gross proceeds of $ 99.0 million in the 2023 Follow-On Offering.

The Company received approximately $ 92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and estimated offering expenses.

In addition, the Company has granted the underwriters a 30-day option to purchase up to 1,650,000 additional shares of common stock at a price of $ 8.46 per share.

Suspension and Termination of ATM Prospectus Supplement

Other than the termination of the prospectus, the Sales Agreement remains in full force and effect.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

15 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 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.

The results, with an average of nine months of follow up in patients who received a therapeutic regimen with three cycles of therapy, and who match the criteria for the planned global Phase 3 trial (n=8), showed a statistically significant reduction in the tumor growth rate (-0.289 mm/yr, p = <0.0001) compared to each patient’s documented growth rate at study entry, and a 100% (8/8) tumor control.

In addition, the visual acuity preservation in the group of patients was 88% (7/8), with the majority of patients being at high-risk for vision loss with tumors close to fovea or optic disk.

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 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.

Enrollment is complete in the Phase 2 trial, and data was presented on November 6, 2023, at the American Academy of Ophthalmology.

The results, with 90% of patients at twelve months of follow-up who received three cycles of therapy in Cohorts 5 and 6, and who match the criteria for the global Phase 3 trial, showed a tumor control rate of 80% (8/10) and the visual acuity preservation rate was 90% (9/10) with the majority of patients being at high-risk for vision loss with tumors close to the fovea or optic disk.

For the 80% of patients that responded, data showed a statistically significant reduction in tumor growth rate (-0.382 mm/yr, p = <0.0001) compared to each patient’s documented growth rate at study entry.

The overall tolerability profile of bel-sar was favorable, with no dose-limiting toxicities, treatment-related serious adverse events or significant adverse events reported as of August 3, 2023.

We received written agreement from the FDA under a Special Protocol Assessment for the design and planned analysis of the Global Phase 3 CoMpass trial indicating concurrence by the FDA with the adequacy of the study, if successful, to address the objectives necessary to support our planned biologics license application submission.

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

The trial is a global, 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 with SC administration, 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 15 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.

The trial is powered at greater than 90%.

We are currently conducting start up activities for the global Phase 3 trial with the goal to dose our first patient in Q4 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.

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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 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 data from this trial in 2024.

We received fast track designation from the FDA’s Division of Oncology, and we are on track to initiate the Phase 2 trial in 2024, with initial data by year-end 2024.

We received Fast Track Designation from the FDA for bel-sar for the treatment of NMIBC in June 2022.

The ongoing Phase 1 multi-center, open-label clinical trial is expected to enroll approximately 19 adult patients.

The trial is designed to assess the safety and tolerability of bel-sar as a single agent.

The trial will provide histopathological evaluation after the local treatment to assess bel-sar’s biological activity.

The trial has completed enrollment of the cohort that received bel-sar injection without light activation.

Protocol mandated safety review found no safety issues and the study has proceeded to the bel-sar injection plus light activation cohorts.

Preliminary data from the first patient in the light activated cohort of the trial, utilizing a single dose of bel-sar with light activation, demonstrated a clinical complete response demonstrated by absence of cancer cells on histopathology with evidence of extensive necrosis and immune activation.

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 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.

From inception through September 30, 2023, we have raised an aggregate of approximately $324.9 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 November 9, 2023, we issued and sold 11,000,000 shares of common stock at a price to the public of $9.00 per share for aggregate gross proceeds of $99.0 million, or the 2023 Follow-On Offering.

We received approximately $92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and estimated offering expenses.

In addition, we have granted the underwriters a 30-day option to purchase up to 1,650,000 additional shares of common stock at a price of $8.46 per share.

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 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.

We issued 261,807 shares of common stock at an average price of $12.49 for aggregate gross proceeds of $3.3 million during the nine months ended September 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’

option to purchase additional shares at a price to the public of $14.00 per share for aggregate gross proceeds of $86.9 million in our initial public offering, or IPO.

We received approximately $78.3 million in net proceeds from the IPO after deducting underwriting discounts, commissions and offering expenses.

In connection with the 2023 Follow-On Offering, on November 6, 2023, we delivered written notice to Jefferies that we were suspending and terminating the prospectus related to the shares issuable in the ATM pursuant to the terms of the Sales Agreement.

As a result, we will not make any sales of our securities pursuant to the Sales Agreement, unless and until a new prospectus, prospectus supplement, or a new registration statement relating to the shares eligible to be sold in the ATM is filed.

Other than the termination of the prospectus, the Sales Agreement remains in full force and effect.

We have incurred significant operating losses in every year since our inception in 2009 and have not generated any revenue.

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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 $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.

Our net losses were $54.3 million and $42.2 million for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, we had an accumulated deficit of $265.2 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 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.

As of September 30, 2023, we had cash and cash equivalents and marketable securities of $149.1 million.

We believe that our existing cash and cash equivalents and marketable securities and $92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and estimated offering expenses, will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2026.

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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Results of Operations

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:

Comparison of the three months ended September 30, 2023 and 2022

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

Three Months Ended

September 30,

(in thousands)

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Research and Development Expenses

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

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

Three Months Ended

September 30,

(in thousands)

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Total research and development expenses

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.

Research and development expenses increased to $15.4 million for the three months ended September 30, 2023 from $11.3 million for the three months ended September 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, and manufacturing and development costs for bel-sar.

General and Administrative Expenses

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

General and administrative expenses increased to $5.1 million for the three months ended September 30, 2023 from $4.8 million for the three months ended September 30, 2022, primarily driven by personnel expenses, as well as increases in general corporate expenses related to growth of the Company.

Comparison of the nine months ended September 30, 2023 and 2022

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

Nine Months Ended

September 30,

(in thousands)

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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

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

Nine Months Ended

September 30,

(in thousands)

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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.

Research and development expenses increased to $45.0 million for the nine months ended September 30, 2023 from $29.1 million for the nine months ended September 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, and manufacturing and development costs for bel-sar.

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.

General and administrative expenses increased to $15.3 million for the nine months ended September 30, 2023 from $13.6 million for the nine months ended September 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 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.

Through September 30, 2023, we have raised an aggregate of approximately $324.9 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 November 9, 2023, we issued and sold 11,000,000 shares of common stock at a price to the public of $9.00 per share for aggregate gross proceeds of $99.0 million in the 2023 Follow-On Offering.

We received approximately $92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and estimated offering expenses.

In addition, we have granted the underwriters a 30-day option to purchase up to 1,650,000 additional shares of common stock at a price of $8.46 per share.

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.

We issued 261,807 shares of common stock at an average price of $12.49 for aggregate gross proceeds of $3.3 million during the nine months ended September 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’

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

We received approximately $78.3 million in net proceeds from the IPO after deducting underwriting discounts, commissions and offering expenses.

Other than the termination of the prospectus, the Sales Agreement remains in full force and effect.

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

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Operating Activities

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.

During the nine months ended September 30, 2023, net cash used in operating activities was $46.5 million primarily due to our net loss of $54.3 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 a decrease in prepaid expenses related to CRO costs incurred for the year associated with the start of our Phase 3 global trial.

During the nine months ended September 30, 2022, net cash used in operating activities was $36.6 million, primarily due to our net loss of $42.2 million and decrease in accounts payable related to the timing of vendor invoicing and payments, partially offset by increases in stock compensation expense and accrued expenses and other liabilities related to personnel expenses and clinical trials.

Investing Activities

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.

Net cash used in investing activities during the nine months ended September 30, 2023 was $23.8 million primarily due to purchases of marketable securities and property and equipment, partially offset by maturities of marketable securities.

Net cash used in investing activities during the nine months ended September 30, 2022 was $51.0 million primarily due to purchases of marketable securities and property and equipment, partially offset by maturities of marketable securities.

Financing Activities

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.

During the nine months ended September 30, 2023, net cash provided by financing activities was $4.3 million from proceeds from stock options exercises, and issuance of common stock under the ATM and the ESPP plan.

During the nine months ended September 30, 2022, net cash provided by financing activities was $0.4 million from proceeds from stock options exercises.

Funding Requirements

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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 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.

As of September 30, 2023, we had cash and cash equivalents and marketable securities of $149.1 million.

Based on our research and development plans, we believe that our existing cash and cash equivalents and marketable securities and $92.6 million in net proceeds from the 2023 Follow-On Offering after deducting underwriting discounts and commissions and estimated offering expenses, will be sufficient to fund our operations into the second half of 2026.

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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If we raise funds through strategic collaboration, licensing or other arrangements, we may relinquish significant rights or grant licenses on terms that are not favorable to us.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the COVID-19 pandemic and otherwise.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Material Cash Requirements

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

The following table summarizes our contractual obligations and commitments as of September 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 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”

During the nine months ended September 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 six months ended June 30, 2023 and determined no pronouncements have material impact to the condensed consolidated financial statements.

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

Emerging Growth Company Status

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If we are a smaller reporting company at the time we cease to be an Emerging Growth Company, or EGC, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

Specifically, as a smaller reporting company we will not be required to obtain a separate attestation of internal control over financial reporting (ICFR) from an outside auditor.

Quantitative and Qualitative Disclosures About Market Risk.

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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