What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2022-02-14 · 139 added, 109 removed, 289 unchanged (46% of the section changed)

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The Company is developing a ddRNAi-based therapeutic (BB-301)

for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), a chronic, life-threatening clinical indication.

for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), a chronic, life-threatening genetic disorder.

is a ddRNAi-based genetic medicine currently under development by Benitec.

is an AAV-based gene therapy designed to both silence the expression of mutant disease-causing genes (to slow, or halt, the biological mechanisms underlying disease progression in OPMD) and simultaneously replace the mutant genes with wild type genes (to drive restoration of function in diseased cells).

is an AAV-based

gene therapy designed to simultaneously silence the expression of the mutant, disease-causing gene (to slow, or halt, the biological mechanisms underlying disease progression in OPMD) and replace the mutant gene with a wild type gene (to drive restoration of function in diseased cells).

This fundamental therapeutic approach to disease management is called “silence and replace”.

The silence and replace mechanism offers the potential to restore the normative physiology of diseased tissues and to improve treatment outcomes for patients suffering from the chronic and, potentially, fatal effects of OPMD.

The silence and replace mechanism offers the potential to restore the normative physiology of diseased cells and tissues and to improve treatment outcomes for patients suffering from the chronic, and potentially fatal, effects of OPMD.

has been granted Orphan Drug Designation in the United States and the European Union.

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The extent to which the coronavirus impacts us will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and its variants, and the actions to contain the coronavirus or treat its impact, including the effectiveness and adoption of vaccines for the virus, among others.

Certain of our research and development efforts are conducted globally, including the ongoing development of our silence and replace therapeutic for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), and will be dependent upon our ability to initiate preclinical and clinical studies despite the ongoing COVID-19

As we continue to actively advance our development programs, including our ongoing Toxicology and Biodistribution study for BB-301, we are in close contact with our principal investigators and preclinical trial sites, which are primarily located in France, and are assessing the impact of COVID-19

Certain elements of our research and development efforts are conducted globally, including the ongoing development of our silence and replace therapeutic for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), and will be dependent upon our ability to initiate preclinical and clinical studies despite the ongoing COVID-19

As we continue to actively advance our development programs, including our ongoing Toxicology and Biodistribution study for BB-301,

we are in close contact with our principal investigators and preclinical trial sites, which are primarily located in France, and are assessing the impact of COVID-19

on our studies and the expected development timelines and costs on an ongoing basis.

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work, was delayed by several months, however, the study has been completed without incident.

The acquisition of chemical reagents, biological reagents and laboratory supplies which are essential for the conduct of basic laboratory research, nonclinical studies and GMP manufacturing of BB-301,

The acquisition of chemical reagents, biological reagents and laboratory supplies which are essential for the conduct of basic laboratory research, the conduct of nonclinical studies and the

completion of GMP manufacturing of BB-301,

has also become challenging due to the disruption of global supply chains inherent to the production of these materials.

We will continue to evaluate the impact of the COVID-19

pandemic on our business and expect to reevaluate the timing of our anticipated preclinical and clinical milestones as we learn more and the impact of COVID-19

pandemic on our business and we expect to reevaluate the timing of our anticipated preclinical and clinical milestones as we learn more and the impact of COVID-19

on our industry becomes clearer.

We have also implemented a rotation system whereby staff work from home and attend the laboratory on designated days which may result in a reduction of laboratory work and a halt of non-essential

business travel.

We have also implemented a halt of non-essential

business travel and a rotation system whereby staff work from home and attend the laboratory on designated days which may result in a reduction of laboratory work.

As we transition our employees back to our premises, there is a risk that COVID-19

infections occur at our offices or laboratory facilities and significantly affect our operations.

Additionally, if any of our critical vendors are impacted, our business could be affected if we become unable to timely procure essential equipment, supplies or services in adequate quantities and at acceptable prices.

Additionally, if any of our critical vendors are impacted, our business could be affected if we become unable to procure essential equipment in a timely manner or obtain supplies or services in adequate quantities and at acceptable prices.

Development Programs

The following table sets forth the current product candidates and their development status:

The following table sets forth the current product candidate and the development status:

Oculopharyngeal Muscular Dystrophy

We are developing BB-301

for the treatment of Oculopharyngeal Muscular Dystrophy, and BB-301

for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), and BB-301

is currently undergoing evaluation in CTA-enabling

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is the lead investigational agent under development by Benitec, and the key attributes of OPMD and BB-301

are outlined in in Figure 3.

are outlined in Figure 3.

Overview of the BB-301

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OPMD is a rare disease, however, patients have been diagnosed with OPMD in at least 33 countries.

Patient populations suffering from OPMD are well-identified and significant geographical clustering has been noted for patients with this disorder, both of which could simplify clinical development and global commercialization efforts for BB-301.

Patient populations suffering from OPMD are well-identified, and significant geographical clustering has been noted for patients with this disorder.

Each of these attributes could facilitate efficient clinical development and global

ommercialization of BB-301.

PABPN1 is a ubiquitous factor that promotes the interaction between the poly(A) polymerase and CPSF (cleavage and polyadenylation specificity factor) and, thus, controls the length of mRNA poly(A) tails, mRNA export from the nucleus, and alternative poly(A) site usage.

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expanded poly-alanine tract of up to 18 contiguous alanine residues, and the mutant protein is prone to the formation of intranuclear aggregates designated as intranuclear inclusions (INIs).

The INIs that sequester wildtype PABPN1 could also contribute to the “loss of function” phenotype associated with OPMD.

The INIs that sequester wildtype PABPN1 may contribute to the “loss of function” phenotype associated with OPMD.

No therapeutic agents are approved for the treatment of OPMD.

Additionally, there are no surgical interventions available with the capacity to alter the long-term deterioration of swallowing function which comprises the key element of the natural history of OPMD.

Additionally, there are no surgical interventions available to OPMD patients that modify the natural history of the disease, which is principally comprised of chronic deterioration of swallowing function.

has received Orphan Drug Designation in the United States and the European Union and, upon achievement of regulatory approval for BB-301

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GLP Toxicology and Biodistribution Study for BB-301.

is directly injected into the pharyngeal muscles known to underlie the morbidity and mortality which characterizes the natural history of OPMD.

In these large animal studies, BB-301

is directly injected into the pharyngeal muscles known to underlie the morbidity and mortality which characterizes the natural history of OPMD in human subjects.

As referenced above, the BB-301

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studies conducted by Benitec.

This study was carried out under the guidance of the scientific team at Benitec, with key elements of the study design and execution conducted in close collaboration with a team of leading experts in both medicine and surgery that have been deeply engaged in the treatment of OPMD patients for several decades.

This study was carried out under the guidance of the scientific team at Benitec, with key elements of the design and execution of the study conducted in close collaboration with a team of experts in both medicine and surgery that have been deeply engaged in the treatment of OPMD patients for decades.

Pilot Dosing Study and the GLP Toxicology and Biodistribution Study for BB-301

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administration,

Confirm the efficiency of vector transduction and transgene expression in the key tissue compartments underlying the natural history of OPMD,

Confirm the efficiency of vector transduction and transgene expression in the key tissue compartments underlying the morbidity and mortality that comprises the natural history of OPMD,

Confirm the optimal BB-301

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administration was developed in collaboration with key surgical experts in the field of Otolaryngology, and this novel method of BB-301

dosing will significantly enhance the ability of treating physicians to accurately administer the AAV-based investigational agent to the muscles that underlie the characteristic deficits associated with disease progression in OPMD.

dosing will significantly enhance the ability of treating physicians to accurately administer the AAV-based

investigational agent to the muscles that underlie the characteristic deficits associated with disease progression in OPMD.

It is important to note that prior BB-301

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Benitec conducted the BB-301

Pilot Dosing Study in Beagle dog subjects to demonstrate that direct intramuscular injection of BB-301 via the use of a proprietary dosing device in an open surgical procedure could safely achieve the following goals:

Pilot Dosing Study in Beagle dog subjects to demonstrate that direct intramuscular injection of BB-301

via the use of a proprietary dosing device in an open surgical procedure could safely achieve the following goals:

Biologically significant and dose-dependent levels of BB-301

tissue transduction (i.e., delivery of the multi-functional BB-301 genetic construct into the target pharyngeal muscle cells),

tissue transduction (i.e., delivery of the multi-functional BB-301

genetic construct into the target pharyngeal muscle cells),

Broad-based and dose-dependent expression of the three distinct genes comprising the BB-301

gene construct within the pharyngeal muscle cells, and

Durable, and biologically significant levels of, target gene knock-down (i.e., inhibition of the expression of the gene of interest) within the pharyngeal muscle cells.

Biologically significant levels of target gene knock-down (i.e., inhibition of the expression of the gene of interest) within the pharyngeal muscle cells.

The Pilot Dosing Study evaluated the safety and biological activity of two concentrations of BB-301

(1.0+E13 vg/mL and 3.0+E13 vg/mL) across three distinct doses (1.0+E13 vg/mL and 3.0+E13 vg/mL with a low injection volume, and 3.0+E13 vg/mL with a high injection volume) following direct intramuscular injection into the Hypopharyngeus (HP) muscles and the Thyropharyngeus (TP) muscles of Beagle dogs via the use of a proprietary delivery device employed in an open surgical procedure.

(1.0+E13 vg/mL and 3.0+E13 vg/mL) across three distinct doses (1.0+E13 vg/mL and 3.0+E13 vg/mL with a low injection volume, and 3.0+E13

vg/mL with a high injection volume) following direct intramuscular injection into the Hypopharyngeus (HP) muscles and the Thyropharyngeus (TP) muscles of Beagle dogs via the use of a proprietary delivery device employed in an open surgical procedure.

The HP muscle in Beagle dogs corresponds to the Middle Pharyngeal Constrictor muscle in human subjects, and the TP muscle in Beagle dogs corresponds to the Inferior Pharyngeal Constrictor muscle in human subjects.

was injected only on Day 1 of the Pilot Dosing Study, and the corresponding canine pharyngeal muscles were harvested for molecular analyses after 8 weeks of observation post-injection.

dosing was carried out by both a veterinary surgeon and an Otolaryngologist with extensive experience regarding the provision of palliative surgical care for OPMD patients.

Molecular analyses are ongoing for the canine subjects treated in the BB-301

Pilot Dosing Study, and the interim data-points highlighted below are derived from completed analyses of pharyngeal muscle tissues isolated from 16 Beagle dog subjects (of the 24-subject

Beagle dog study population).

dosing was carried out independently by a veterinary surgeon and an Otolaryngologist with extensive experience regarding the provision of palliative surgical care for OPMD patients.

Molecular analyses have been completed for the canine subjects treated in the BB-301

Pilot Dosing Study.

Key interim data-sets derived from the analyses of pharyngeal muscle tissues isolated from 16 Beagle dog subjects (of the 24-subject

Beagle dog study population) are highlighted below.

The final data-set

derived from the completed molecular analyses of the pharyngeal muscle tissues of the canine subjects treated on the Pilot Dosing Study is expected to be released during 2022.

The preliminary results are summarized below:

derived from the completed molecular analyses of the pharyngeal muscle tissues of the canine subjects treated on the Pilot Dosing Study will be presented in a peer-reviewed format.

The key interim data-sets are summarized below:

Pharyngeal Muscle Tissue Transduction Levels Achieved by BB-301

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within Pharyngeal Muscle Tissues

Regarding Wild Type PABPN1 Silencing (i.e.

target “knock-down”) Observed for BB-301

Regarding Wild Type PABPN1 Silencing (i.e., target “knock-down”) Observed for BB-301

Within the Pharyngeal Muscle Tissues (Figure 8):

As noted above, BB-301

encodes two distinct siRNA species (i.e.

siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of all forms of the PABPN1 protein (siRNA13 and siRNA17 silence the expression of both wild type PABPN1 [wtPABPN1] and mutant PABPN1).

While the Beagle dog subjects treated in the current BB-301

encodes two distinct siRNA species (i.e., siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of all forms of the PABPN1 protein (siRNA13 and siRNA17 silence the expression of both wild type PABPN1 [wtPABPN1] and mutant PABPN1).

While the Beagle dog subjects treated in the BB-301

Pilot Dosing Study do not express mutant PABPN1, the level of BB-301-driven

gene silencing for the PABPN1 target can be indirectly assessed in these study subjects due to the equivalent inhibitory effects of siRNA13 and siRNA17 on both wtPABPN1 and mutant PABPN1.

Thus, the wtPABPN1 silencing activity observed in the current BB-301

Thus, the wtPABPN1 silencing activity observed in the BB-301

Pilot Dosing Study serves as a surrogate for the silencing activity that would be anticipated in the presence of mutant PABPN1.

has been evaluated in prior non-clinical

studies in animals that both express mutant PABPN1 and manifest the key signs and symptoms of OPMD;

in the animal model of OPMD (i.e.

the A17 mouse model), the achievement of PABPN1 silencing levels of 31% inhibition (or higher) led to resolution of OPMD disease symptoms and the elimination of the histopathological hallmarks of OPMD.

PABPN1 Silencing (i.e.

“target knock-down”) Achieved by BB-301

studies in animals that express mutant PABPN1 and, as a result, manifest the symptomatic phenotype of OPMD;

in the symptomatic animal model of OPMD (i.e.

the A17 mouse model), the achievement of PABPN1 silencing levels of 31% inhibition (or higher) following BB-301

administration led to resolution of OPMD disease symptoms and the elimination of the histopathological hallmarks of OPMD.

PABPN1 Silencing (i.e., “target knock-down”) Achieved by BB-301

within Pharyngeal Muscle Tissues

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The current proprietary method of BB-301

delivery to the key pharyngeal muscles of study subjects and the proprietary molecular analytical methods employed to assay the pharyngeal muscle tissues of study subjects, both methods having been developed by the Benitec team, led to the observation of broad-based transduction of the targeted pharyngeal muscle tissues (Figure 9, represents individual sections of the TP muscle following BB-301

delivery to the key pharyngeal muscles of study subjects, and the proprietary molecular analytical methods employed to assay the pharyngeal muscle tissues of study subjects, with both methods having been developed by the Benitec team, led to the observation of broad-based transduction of the targeted pharyngeal muscle tissues (Figure 9, represents individual sections of the TP muscle following BB-301

Critically, the Benitec-developed methods also facilitated the achievement of a 228-fold

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transduction observed by the previous BB-301

licensee (Figure 10).

licensee at identical BB-301

doses in identical canine study populations (Figure 10).

Transduction Levels Achieved for Individual Sections of the TP Muscle Following BB-301

Impact of Benitec-Designed Methodological Improvements to the BB-301

Large Animal Study Design on the Relative Pharyngeal Muscle Tissue Transduction Levels Achieved

Impact of the Methodological Improvements to the BB-301

Large Animal Dosing Study Design on the Relative Pharyngeal Muscle Tissue Transduction Levels Achieved by Benitec vs.

the Former BB-301

Following the disclosure of the positive interim BB-301

Pilot Dosing Study results, Benitec completed a Scientific Advice meeting with The National Agency for the Safety of Medicines and Health Products in France (L’Agence nationale de sécurité du médicament et des produits de santé or “ANSM”) in the first half of 2021.

The Scientific Advice meeting was conducted to review and confirm the adequacy of:

The non-clinical

data derived from the evaluation of BB-301

in both the murine proof-of

concept studies and the Pilot Dosing study in Beagle dogs

The experimental, analytical, and statistical methods comprising the 12-week

GLP Toxicology and Biodistribution study in Beagle dogs

The large-scale

manufacturing plan for clinical grade BB-301

drug product for use in the Phase 1b/2a clinical study in OPMD patients

The design of the Phase 1b/2a clinical study slated for initiation during 2022

Pilot Dosing Study was viewed as an appropriate dose range finding study.

The interim data derived from the Pilot Dosing Study regarding BB-301

pharyngeal muscle tissue transduction, BB-301

transgene expression and the resulting knock-down of wild type PABPN1 supported the adequacy of the data derived from this study to inform the choice of BB-301

doses for use in the GLP Toxicology and Biodistribution Study.

The design of the GLP Toxicology and Biodistribution study was viewed as appropriate to support first-in-human

testing of BB-301.

Pending the final results of the ongoing GLP Toxicology and Biodistribution study, the BB-301

Pilot Dosing Study data and the murine proof-of-concept

study data are sufficient to inform the choice of the BB-301

drug doses that will be evaluated in the upcoming Phase 1b/2a study.

drug product has been reproducibly manufactured at large-scale

in the past, the manufacturing plan for clinical grade BB-301

drug product is known to be able to be conducted under GMP conditions with a production process analogous to that employed in prior large-scale

production runs.

Finally, the design of the Phase 1b/2a clinical trial can support the evaluation of BB-301

safety and clinical efficacy in key populations of OPMD patients.

Regarding our regulatory interactions with the FDA, Benitec completed a Type C meeting in the fourth quarter of 2021.

Regarding our regulatory interactions with Health Canada, Benitec completed a pre-CTA

meeting in the fourth quarter of 2021.

Benitec continues to plan for the initiation of the First-in-Human

clinical study of BB-301

in OPMD patients during 2022.

Pilot Dosing Study results, Benitec completed pre-CTA

meetings with regulatory agencies in France, Canada, and the United States.

Summary of Regulatory Interactions:

Benitec successfully completed the regulatory interactions required to support initiation of the BB-301

clinical development program in 2022

Successful regulatory engagement comprised the completion of the following meetings:

Trial Application (Pre-CTA)

Consultation Meeting with Health Canada

Scientific Advice Meeting with The National Agency for the Safety of Medicines and Health Products in France (L’Agence nationale de sécurité du médicament et des produits de santé or “ANSM”)

Type C Meeting with the U.S.

Food and Drug Administration (“FDA”)

Benitec will begin the clinical development program for BB-301

Summary of the BB-301

Clinical Development Program:

clinical development program will begin in 2022, and the conduct of the development program will comprise approximately 76-weeks

for each OPMD study participant, inclusive of:

pre-treatment

observation periods employing quantitative radiographic imaging techniques for evaluation of the baseline disposition and natural history of OPMD-derived dysphagia in each study participant

1 day of BB-301

dosing to initiate participation in the Phase 1b/2a single-arm,

open-label, sequential, dose escalation cohort study

of post-dosing follow-up

for conclusive evaluation of the primary and secondary endpoints of the Phase 1b/2a BB-301

treatment study

The OPMD Natural History Study will begin in 2022, and this observational study will facilitate the characterization of OPMD patient disposition at baseline and assess subsequent rates of progression of dysphagia (swallowing impairment) in subjects with OPMD via the use of quantitative radiographic measures of global swallowing function and pharyngeal constrictor muscle function along with clinical assessments and patient-reported self-assessments of swallowing function

Videofluoroscopic Swallowing Studies (VFSS) will be conducted to complete the following methodological assessments:

Dynamic Imaging Grade of Swallowing Toxicity Scale (DIGEST)

Pharyngeal Area at Maximum Constriction (PhAMPC)

Pharyngeal Constriction Ratio (PCR)

Clinical measures of global swallowing capacity and oropharyngeal dysphagia

Patient-reported measures of oropharyngeal dysphagia

The natural history of dysphagia observed for each OPMD study participant, as characterized by the quantitative radiographic measures and the clinical and patient self-reported assessments outlined above, will serve as the baseline for comparative assessments of safety and efficacy of BB-301

upon rollover of OPMD study subjects from the Natural History Study onto the Phase 1b/2a BB-301

treatment study

Upon the achievement of 6-months

in the Natural History Study, OPMD Natural History Study participants can become eligible for enrollment onto the Phase 1b/2a treatment study with the investigational genetic medicine, BB-301,

which uses an AAV9-based gene therapy approach for the treatment of OPMD-derived dysphagia

This first-in-human

(FIH) clinical trial will be a Phase 1b/2a, open-label, dose escalation study to evaluate the safety and clinical activity of intramuscular doses of BB-301

administered to the pharyngeal muscles of subjects with OPMD

Upon rollover from the Natural History Study onto the Phase 1b/2a BB-301

treatment study, the follow-up

of OPMD study participants will continue for 52-weeks,

and the primary endpoints (safety and tolerability) and secondary endpoints (comprising the quantitative radiographic measures of global swallowing function and pharyngeal constrictor muscle function, and the clinical and patient-reported assessments noted above) will be evaluated during each 90-day

period following Day 1 (Day 1 represents the day of BB-301

intramuscular injection).

Royalties, milestone payments and other license fees

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Revenues from licensing fees are included in the revenue from customers line item on our consolidated statements of operations and comprehensive loss.

Our licensing fees have been generated through the licensing of our ddRNAi technology to biopharmaceutical companies.

Our licensing fees have been

generated through the licensing of our ddRNAi technology to biopharmaceutical companies.

The following table sets forth a summary of our revenues for each of the periods set forth below:

Three Months Ended

Six Months Ended

Nine Months Ended

Licensing revenues from customers

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Revenues from customers

During the six months ended December 31, 2021 and 2020, respectively, the Company recognized $25 thousand and $56 thousand in customer revenues.

For the three months ended December 31, 2021 and 2020, respectively, the Company recognized $25 thousand and $1 thousand in customer revenues.

During the nine months ended March 31, 2022 and 2021, respectively, the Company recognized $73 thousand and $57 thousand in customer revenues.

For the three months ended March 31, 2022 and 2021, respectively, the Company recognized $48 thousand and $1 thousand in customer revenues.

The increase in revenues from customers is due to the increase in licensing revenues in the current period.

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Three Months Ended

Six Months Ended

Nine Months Ended

Operating Expenses:

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Total operating expenses

During the three and six months ended December 31, 2021, respectively, we incurred $0 in royalties and license fees, as compared to $(19) and $114 thousand, respectively, for the comparable periods ended December 31, 2020.

During the three and six months ended December 31, 2021, respectively, we incurred $3.1 million and $5.9 million in research and development expenses, as compared to $1.2 million and $1.9 million, respectively, for the comparable periods ended December 31, 2020.

The increase in research and development expenses is primarily related to the commencement of the BB-301

During the three and nine months ended March 31, 2022, respectively, we incurred $0 in royalties and license fees, as compared to $7 thousand and $122 thousand, respectively, for the comparable periods ended March 31, 2021.

During the three and nine months ended March 31, 2022, respectively, we incurred $2.2 million and $8.1 million in research and development expenses, as compared to $2.8 million and $4.7 million, respectively, for the comparable periods ended March 31, 2021.

The decrease in research and development expenses for the three-month period relates primarily to the

Regulatory Toxicology Study in Beagles at Charles River Laboratories in Evreux, France.

As planned, the Company began incurring more costs related to the execution of two large nonclinical studies in Beagles, along with the commercial-scale GMP-grade

manufacturing of BB-301,

all of which is required to facilitate the CTA filing and the IND filing for BB-301

General and administrative expense was $1.7 million and $3.8 million for the three and six months ended December 31, 2021, as compared to $2.1 million and $3.9 million for the comparable periods ended December 31, 2020.

The increase for the three and six month periods was due to increases in insurance, consultants, legal and accounting fees.

As milestones were reached, the Company began incurring lower costs related to the execution of two large nonclinical studies in Beagles, along with the commercial-scale

manufacturing of

all of which are required to facilitate the CTA filing and the IND filing for

The increase for the nine-month period also relates to the

Regulatory Toxicology Study.

In the process of achieving key milestones, the Company incurred higher costs related to execution of the

Beagle studies and commercial-scale GMP

manufacturing during the six months ended December 31, 2021.

General and administrative expense was $1.3 million and $5.1 million for the three and nine months ended March 31, 2022, as compared to $1.0 million and $5.0 million for the comparable periods ended March 31, 2021.

The increase for the three and nine month periods was due to increases in insurance, consultants, legal and accounting fees, and share-based compensation.

Other Income (Expense)

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Three Months Ended

Six Months Ended

Nine Months Ended

Other Income (Loss):

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Interest expense, net

Other income, net

Other income (expense), net

Unrealized loss on investment

Total other income (loss), net

The other income (loss), net during the three and six months ended December 31, 2021, respectively, totaled $14 thousand and $(210) thousand, which consists of foreign currency transaction loss, interest expense, other income, and unrealized gain on investment.

During the three and six months ended December 31, 2020, respectively, other income (expense), net totaled $7 thousand and $(22) thousand.

Foreign currency transaction gain has increased due to a change in foreign exchange rates.

The other income (loss), net during the three and nine months ended March 31, 2022, respectively, totaled $185 thousand and $(25) thousand, which consists of foreign currency transaction gains, interest expense, other income, and unrealized gain on investment.

During the three and nine months ended March 31, 2021, respectively, other income (expense), net totaled $(116) thousand and $(138) thousand.

Foreign currency transaction losses have swung to gains due to a change in foreign exchange rates.

Other income, net decreased due to no longer receiving COVID-19

stimulus incentives from the Australian government in 2022.

Unrealized loss on investment had an increase for the three and six months ended December 31, 2021, compared to the three and six months ended December 31, 2020.

Unrealized loss on investment increased for the three and nine months ended March 31, 2022, compared to the three and nine months ended March 31, 2021.

Liquidity and Capital Resources

The Company has incurred cumulative losses and negative cash flows from operations since our predecessor’s inception in 1995.

The Company had accumulated losses of $140 million as of December 31, 2021.

The Company had accumulated losses of $143 million as of March 31, 2022.

We expect that our research and development expenses may increase due to the continued development of the OPMD program.

It is also likely that there will be an increase in the general and administrative expenses due to the obligations of being a domestic public company in the United States.

We had no borrowings as of December 31, 2021 and do not currently have a credit facility.

As of December 31, 2021, we had cash and cash equivalents of approximately $12.3 million.

We had no borrowings as of March 31, 2022 and do not currently have a credit facility.

As of March 31, 2022, we had cash and cash equivalents of approximately $8.6 million.

Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

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The following table sets forth a summary of the net cash flow activity for each of the periods set forth below:

Six Months Ended

Nine Months Ended

Net cash provided by (used in):

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Operating activities

Net cash used in operating activities for the six months ended December 31, 2021 and 2020 was $7.6 million and $5.7 million, respectively.

Net cash used in operating activities was primarily the result of our net loss and change in working capital and a decrease in payables.

Net cash used in operating activities for the nine months ended March 31, 2022 and 2021 was $11.0 million and $7.7 million, respectively.

Net cash used in operating activities was primarily the result of our net loss, partially offset by non-cash

expenses, and changes in working capital, including an increase in payables.

Investing activities

Net cash used in investing activities for the six months ended December 30, 2021 and 2020 was $0 and $0.3 million, respectively.

Net cash used in investing activities for the nine months ended March 31, 2022 and 2021 was $0 and $0.4 million, respectively.

The change was primarily related to a decrease in purchases of equipment in 2022 as there were none compared to purchases of $0.4 million in the same period of 2021.

Financing activities

Net cash provided by financing activities was $0 and $9.9 million for the six months ended December 31, 2021 and 2020, respectively.

Cash from financing activities in 2020 were related to the issuance of common stock, including $11.5 million in gross proceeds from the October 2020 Capital Raise, partially offset by $1.6 million in share issuance costs.

Net cash provided by financing activities was $0 and $9.9 million for the nine months ended March 31, 2022 and 2021, respectively.

Cash from financing activities in 2021 was related to the issuance of common stock, including $11.5 million in gross proceeds from the October 2020 Capital Raise, partially offset by $1.6 million in share issuance costs.

The future of the Company as an operating business will depend on its ability to manage operating costs and budgeted amounts and obtain adequate financing.

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We are subject to the risks inherent in the development of new gene therapy products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

We estimate that our cash and cash equivalents will be sufficient to fund the Company’s operations at least for the next twelve months.

The Company does not have adequate liquidity to fund its operations for the next 12 months without raising additional funds and the success of raising such additional capital is not solely within the control of the Company.

These factors raise substantial doubt about its ability to continue as a going concern.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis