What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-09 compared with 2023-08-03 · 136 added, 210 removed, 464 unchanged (43% of the section changed)

4 unchanged sentences

(In thousands, except par value)

September 30,

Current assets:

Cash and cash equivalents

$ 19,278  

$ 34,946  

Marketable securities

149,474  

151,663  

Prepaid expenses and other current assets

Total current assets

175,272  

194,791  

Property and equipment, net

Operating lease, right-of-use ("ROU") asset

$ 179,181  

$ 199,645  

Liabilities and Stockholders' Equity

1 unchanged sentence

Accounts payable

$ 3,382  

Accrued expenses

11,690  

Operating lease obligations, current portion

Total current liabilities

16,169  

Operating lease obligations, long-term portion

Total liabilities

10,895  

18,007  

Commitments and contingencies (Note 7)

2 unchanged sentences

300,000 shares authorized;

127,459 and 126,495 shares issued at June 30, 2023 and December 31, 2022, respectively;

127,388 and 126,302 shares outstanding at June 30, 2023 and December 31, 2022, respectively

127,476 and 126,495 shares issued at September 30, 2023 and December 31, 2022, respectively;

127,445 and 126,302 shares outstanding at September 30, 2023 and December 31, 2022, respectively

Additional paid-in-capital

460,709  

454,741  

Accumulated other comprehensive loss

( 507 )  

Accumulated deficit

( 291,929 )  

Total stockholders' equity

168,286  

181,638  

Total liabilities and stockholders' equity

$ 179,181  

$ 199,645  

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

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

8 unchanged sentences

Other comprehensive loss:

Unrealized loss on marketable securities

Unrealized gain (loss) on marketable securities

Comprehensive loss

8 unchanged sentences

Balance at December 31, 2022

126,302  

$ 454,741  

$ ( 302 )  

$ ( 272,814 )  

$ 181,638  

Vesting of share-based awards

2 unchanged sentences

Unrealized gain on marketable securities

( 7,837 )  

Balance at March 31, 2023

126,375  

$ 456,049  

$ ( 146 )  

$ ( 280,651 )  

$ 175,265  

Common shares issued, net of issuance costs of $ 0.1 million

$ 3,032  

Vesting of share-based awards

1 unchanged sentence

Unrealized loss on marketable securities

( 361 )  

( 11,278 )  

Balance at June 30, 2023

127,388  

$ 460,709  

$ ( 507 )  

$ ( 291,929 )  

$ 168,286  

Vesting of share-based awards

Stock-based compensation

Exercise of common stock options

Unrealized gain on marketable securities

Balance at September 30, 2023

Balance at December 31, 2021

100,832  

$ 373,657  

$ ( 233,589 )  

$ 140,078  

Vesting of share-based awards

Stock-based compensation

( 7,162 )  

Balance at March 31, 2022

100,905  

$ 375,231  

$ ( 240,751 )  

$ 134,490  

Vesting of share-based awards

1 unchanged sentence

Unrealized loss on marketable securities

( 512 )  

( 8,494 )  

Balance at June 30, 2022

100,968  

$ 376,675  

$ ( 512 )  

$ ( 249,245 )  

$ 126,928  

Vesting of share-based awards

Stock-based compensation

Exercise of common stock options

Unrealized loss on marketable securities

Balance at September 30, 2022

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

3 unchanged sentences

(In thousands)

For the Six Months

Ended June 30,

For the Nine Months

Ended September 30,

Cash flows from operating activities:

27 unchanged sentences

Unrealized loss on marketable securities

Purchase of securities included in accrued expenses

Fixed asset costs included in accounts payable

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

2 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

 Nature of Business and Basis of Presentation

Compass Therapeutics, Inc.

18 unchanged sentences

In addition, the Company is dependent upon the services of its employees and consultants.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s consolidated financial position as of June 30, 2023 and its consolidated results of operations, comprehensive loss and changes in stockholders’

equity for the three and six months ended June 30, 2023 and 2022 and cash flows for the six months ended June 30, 2023 and 2022.

Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s consolidated financial position as of September 30, 2023 and its consolidated results of operations, comprehensive loss and changes in stockholders’

equity for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022.

Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The unaudited condensed consolidated financial statements include the accounts of Compass Therapeutics, Inc.

1 unchanged sentence

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

The condensed consolidated balance sheet at December 31, 2022 has been deri ved from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements in the Company’s 

Annual Report on Form 10 -K for the fiscal year ended December 31, 2022  

(the “Annual Report”).

The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Annual Report”).

Since our inception, we have devoted substantially all of our efforts to organizing and staffing our Company, business planning, raising capital, research and development activities, building our intellectual property portfolio and providing general and administrative support for these operations.

We have funded our operations with proceeds from the sale of our equity securities and borrowing from debt arrangements.

Through June 30, 2023, we have received $ 412 million in gross proceeds from the sale of equity securities.

As of June 30, 2023, we had cash, cash equivalents and marketable securities of $ 169 million.

Through September 30, 2023, we have received $ 412 million in gross proceeds from the sale of equity securities.

As of September 30, 2023, we had cash, cash equivalents and marketable securities of $ 164 million.

Based on our research and development plans, we expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into 2026.

COVID-19 Update

We have been monitoring the COVID- 19 pandemic and its potential impact on our business.

We continue to monitor the COVID-19 pandemic and its potential impact on our business.

There have been delays in sourcing of selected supplies required for the manufacturing of material to be used in our clinical trials, and these delays have impacted and may impact the timing of our future clinical trials.

1 unchanged sentence

We are continuing to assess the potential impact of the COVID-19 pandemic on our current and future business and operations, including our expenses and clinical trials, as well as on our industry and the healthcare system.

 Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report.

Fair Value Measurements

The following tables represent the Company’s financial assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

Fair Value Measurements as of June 30, 2023 Using:

The following tables represent the Company’s financial assets that are measured at fair value on a recurring basis 

 and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

Fair Value Measurements as of September 30, 2023 Using:

Quoted Prices in

7 unchanged sentences

Asset-backed securities

Cash equivalents

Fair Value Measurements as of December 31, 2022 Using:

8 unchanged sentences

Cash equivalents

 Marketable Securities

The objectives of the Company’s investment policy are to ensure the safety and preservation of invested funds, as well as to maintain liquidity sufficient to meet cash flow requirements.

7 unchanged sentences

The following tables summarize marketable securities held (in thousands):

As of June 30, 2023

As of September 30, 2023

Amortized Cost

14 unchanged sentences

Asset-backed securities

June 30, 2023

September 30, 2023

December 31, 2022

1 unchanged sentence

Maturing after one year through two years

Property and Equipment

Property and equipment consist of the following (in thousands):

$ 5,148  

$ 5,137  

September 30,

Leasehold improvements

2 unchanged sentences

Accumulated depreciation

( 5,942 )  

Property and equipment, net

$ 1,204  

$ 1,567  

Depreciation and amortization expense for the six months ended June 30, 2023 and 2022 was $ 0.4 million.

 Accrued Expenses

Depreciation and amortization expense for the nine months ended September 30, 2023 and 2022 was $ 0.5 million and $ 0.6 million respectively.   

Accrued Expenses

Accrued expenses consist of the following (in thousands):

September 30,

Project expenses

$ 6,583  

$ 10,038  

Compensation and benefits

Total accrued expenses

$ 7,827  

$ 11,690  

Project expenses are primarily from $ 6.5 million of accrued manufacturing expenses.

These expenses are mostly for the manufacture and purchase of drug product for CTX- 009 including $ 5.3 million of minimum contractual obligations.

Project expenses consist of $ 2.9 million of accrued manufacturing expenses and $ 0.9 million of accrued clinical expenses.

Included in accrued manufacturing expenses are $ 2.1 million of minimum contractual obligations related to CTX-009.

Commitments and Contingencies

8 unchanged sentences

The Facility lease contains scheduled rent increases over the lease term.

The discount rate used for the Facility lease is 6.25 %, and the remaining lease term of the Facility lease is one year and eleven months as of June 30, 2023.

Cash payments related to the Facility were $ 0.3 million for the three months ending June 30, 2023 and 2022 and $ 0.7 million for the six months ending June 30, 2023 and 2022.

The discount rate used for the Facility lease is 6.25 %, and the remaining lease term of the Facility lease is one year and eight months as of September 30, 2023.

Cash payments related to the Facility were $ 0.3 million for the three months ending September 30, 2023 and 2022 and $ 1.0 million for the nine months ending September 30, 2023 and 2022.

The table below presents the undiscounted cash flows for the lease term.

7 unchanged sentences

Operating lease obligations, long-term portion

$ 1,197  

Milestone payments

1 unchanged sentence

See Note 11 for additional information on the ABL Bio Agreement.

 Stock-Based Compensation

Stock-based compensation expense for the three and six months ended June 30, 2023 and 2022 was classified in the condensed consolidated statement of operations as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Stock-Based Compensation

Stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 was classified in the condensed consolidated statement of operations as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

General and administrative

$ 1,628  

$ 1,444  

$ 2,895  

$ 3,018  

As of June 30, 2023, remaining unrecognized stock-based compensation cost from all plans to be recognized in future periods totaled $ 17.4 million.

As of September 30, 2023, the remaining unrecognized stock-based compensation cost from all plans to be recognized in future periods totaled $ 15.8 million.

Restricted Stock:

Prior to the adoption of the 2020 Plan, the Company issued restricted stock.

A summary of the Company’s restricted stock activity during the three and six months ended June 30, 2023 is as follows:

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

Weighted Average Fair Value

1 unchanged sentence

Unvested, December 31, 2022

$ 1.74  

( 122 )  

$ 1.71  

Forfeited or canceled

Unvested, June 30, 2023

$ 1.79  

As of June 30, 2023, the total unrecognized compensation cost related to stock compensation expense for restricted stock is $ 0.1 million, expected to be recognized over a weighted average period of 0.5 years.

Unvested, September 30, 2023

As of September 30, 2023, the total unrecognized compensation cost related to stock compensation expense for restricted stock is $ 0.1 million, expected to be recognized over a weighted average period of 0.3 years.

In June 2020, the Company’s board of directors adopted the 2020 Stock Option and Incentive Plan (the “2020 Plan”) and reserved 2.9 million shares of common stock for issuance under this plan.

1 unchanged sentence

The increase on January 1, 2023 was 5.1 million shares.

As of June 30, 2023, 5.2 million shares remain available for grant.

As of September 30, 2023, 5.1 million shares remain available for grant.

The 2020 Plan authorizes the board of directors or a committee of the board to grant incentive stock options, nonqualified stock options, restricted stock awards and restricted stock units ("RSUs") to eligible officers, employees, consultants and directors of the Company.

2 unchanged sentences

The following table summarizes the stock option activity for the 2020 Plan:

(In thousands)

Term (In years)

(In thousands)

Outstanding at December 31, 2022

$ 3.89  

$ 6,316  

$ 3.80  

( 12 )  

$ 2.43  

Forfeited/canceled

( 228 )  

$ 4.75  

Outstanding at June 30, 2023

$ 3.84  

$ 1,814  

Vested at June 30, 2023

$ 4.34  

For the six months ended June 30, 2023, the weighted average grant date fair value for options granted was $ 2.85 .

The intrinsic value for options vested as of June 30, 2023, was $ 0.6 million.

As of June 30, 2023, the total unrecognized compensation cost related to outstanding options was $ 11.3 million, to be recognized over a weighted average period of 3 years.

For the six months ended June 30, 2022, the weighted average grant date fair value for options granted was $ 2.29 .

The intrinsic value for options vested as of June 30, 2022, was $ 47 thousand.

The weighted average assumptions used in the Black-Scholes pricing model to determine the fair value of stock options granted during the six months ended June 30, 2023 and 2022 were as follows:

Six Months Ended June 30,

Outstanding at September 30, 2023

Vested at September 30, 2023

For the nine months ended September 30, 2023, the weighted average grant date fair value for options granted was $ 2.82 .

The intrinsic value for options vested as of September 30, 2023, was $ 34 thousand.

As of September 30, 2023, the total unrecognized compensation cost related to outstanding options was $ 10.4 million, to be recognized over a weighted average period of 2.8 years.

For the nine months ended September 30, 2022, the weighted average grant date fair value for options granted was $ 2.30 .

The intrinsic value for options vested as of September 30, 2022, was $ 19 thousand.

The weighted average assumptions used in the Black-Scholes pricing model to determine the fair value of stock options granted during the nine months ended September 30, 2023 and 2022 were as follows:

Nine Months Ended September 30,

Expected term (in years)

5 unchanged sentences

The following table summarizes the RSU activity for the 2020 Plan:

(In thousands)

Average Price

Average Fair Value (In thousands)

Average Fair Value (000's)

Unvested, December 31, 2022

$ 3.83  

$ 3,447  

Forfeited or canceled

Unvested, June 30, 2023

$ 3.88  

$ 6,984  

Unvested, September 30, 2023

The weighted average price per share is the weighted grant price based on the closing market price of each of the stock grants.

The weighted average fair value is the weighted average share price times the number of shares.

As of June 30, 2023, remaining unrecognized compensation cost related to RSUs to be recognized in future periods totaled $ 5.9 million, which is expected to be recognized over a weighted average period of 3 years.

As of September 30, 2023, the remaining unrecognized compensation cost related to RSUs to be recognized in future periods totaled $ 5.4 million, which is expected to be recognized over a weighted average period of 2.8 years.

Related Parties and Related-Party Transactions

There were no material related party transactions during the six months ended June 30, 2023 and 2022.

There were no material related party transactions during the nine months ended September 30, 2023 and 2022.

The following table summarizes other income (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Interest income

1 unchanged sentence

Total other income

License, Research and Collaboration Agreements

11 unchanged sentences

The agreement includes provisions for payment of royalties at rates ranging in the single digits as a percentage of future net sales within a specified term from the first commercial sale for certain antibodies, including our product candidate, CTX-471.

There were no milestone payments made during 

As of June 30, 2023, future potential milestone payments in connection with this agreement amounted to $ 2.0 million.

There were no milestone payments made during 2023.

As of September 30, 2023, future potential milestone payments in connection with this agreement amounted to $ 2.0 million.

Stockholders ’

Through June 2023, we sold through our at-the-market (“ATM”) agreement with Jefferies LLC, 951,873 shares of common stock at an average price of $ 3.28 for total proceeds of $ 3.1 million and net proceeds of $ 3.0 million.

Through September 30, 2023, we sold through our at-the-market (“ATM”) agreement with Jefferies LLC, 951,873 shares of common stock at an average price of $ 3.28 for total proceeds of $ 3.1 million and net proceeds of $ 3.0 million.

Management ’

1 unchanged sentence

The following discussion of the financial condition and results of operations of Compass Therapeutics, Inc.

should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q for the three and six month periods ended June 30, 2023.

should be read in conjunction with the financial statements and the notes to those statements included in this Quarterly Report on Form 10-Q for the three and nine month periods ended September 30, 2023.

Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risk, uncertainties and assumptions.

3 unchanged sentences

Risk Factors ”

section included in our 

Annual Report on Form 10-K for the fiscal year ended December 31, 2022 , for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

section included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 , for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical-stage, oncology-focused biopharmaceutical company developing proprietary antibody-based therapeutics to treat multiple human diseases.

8 unchanged sentences

CTX-009 and CTX-471.

In addition, a third product candidate, CTX-8371, is expected to enter the clinic in the second half of 2023.

In addition, the IND to our third product candidate, CTX-8371, has been cleared in October, and is expected to enter the clinic in the fourth quarter of 2023.

A summary of these product candidates is presented below.

5 unchanged sentences

CTX-009 is undergoing clinical development in patients with advanced solid tumors in the United States, South Korea and China.

A Phase 1 dose escalation and dose expansion monotherapy trial in patients with solid tumors and a Phase 1b trial of CTX-009 in combination with chemotherapy were completed in South Korea.

A Phase 1 dose escalation and dose expansion monotherapy trial in patients with solid tumors and a Phase 1b trial of CTX-009 in combination with chemotherapy was completed in South Korea.

In addition, a Phase 2 trial of CTX-009 in combination with chemotherapy in patients with advanced biliary tract cancer is ongoing in South Korea.

The first part of the Phase 2 trial has recently been completed and data from that study were presented at ASCO GI in January 2023.

The first part of the Phase 2 trial is complete and data from that study were presented at ASCO GI in January 2023.

We currently have two open clinical trials in the United States:

a Phase 2 trial of CTX-009 in patients with advanced colorectal cancer (“CRC”) and a Phase 2/3 trial of CTX-009 in combination with paclitaxel in patients with advanced biliary tract cancer (“BTC”).

We have licensed exclusive global rights to CTX-009, outside of South Korea, from ABL Bio, Inc.

We licensed the exclusive global rights to CTX-009, outside of South Korea, from ABL Bio, Inc.

(“ABL Bio”), a South Korea-based clinical-stage company focused on developing antibody therapeutics.

7 unchanged sentences

We are conducting a Phase 2 monotherapy clinical trial of CTX-009 in patients with metastatic colorectal cancer who have received two or three prior systemic therapies irrespective of their KRAS mutation status.

The trial is designed to assess the safety and efficacy of CTX-009 as a monotherapy in patients with colorectal cancer treated in the third and fourth-line settings and utilizes a Simon Two-Stage adaptive design where the criteria to advance to the second stage of the trial is three confirmed partial responses observed in 37 patients enrolled in Stage 1 of the trial.

The trial is designed to assess the safety and efficacy of CTX-009 as a monotherapy in patients with colorectal cancer treated in the third and fourth-line settings and utilizes a Simon Two-Stage adaptive design where the criteria to advance to the second stage of the trial is three partial responses observed in 37 patients enrolled in Part A of the trial.

Based on the Simon Two-Stage design, when the criteria for the first stage are met, the trial progresses to the second stage, at which time 47 additional patients will be enrolled.

We expect the first interim data readout from the trial in the second half of 2023.

We expect the first interim data readout from the trial in the fourth quarter of 2023.

The trial can be found on www.clinicaltrials.gov (identifier NCT 05513742).

4 unchanged sentences

The primary endpoint of the trial is overall response rate (“ORR”) and the secondary endpoints include progression free survival (“PFS”), disease control rate (“DCR”), duration of response (“DOR”) and overall survival (“OS”).

In the first half of this year we opened 20 clinical sites and started enrolling patients in this study.

In the first nine months of this year, we opened 29 clinical sites and started enrolling patients in this study. 

Enrollment in the third quarter increased relative to the first half of the year, in part due to the opening of several clinical sites at large medical centers across the country that have high enrollment rate relative to the smaller medical centers.

Top line data from this study is expected in the second half of 2024.

The trial can be found on www.clinicaltrials.gov (Identifier NCT 05506943).

DEVELOPMENT PLANS FOR CTX-009

We intend to explore the potential of CTX-009 in additional indications, based on data from pre-clinical models, potential biomarkers such as DLL4, and clinical data from CTX-009 trials providing signs of potential activity of CTX-009 in additional indications such as ovarian cancer, liver cancer, gastric cancer, pancreatic cancer, renal cell cancer, neuroendocrine cancer and others.

21 unchanged sentences

Patients enrolled in the trial will be treated with CTX-471 in combination with pembrolizumab with the goal of restoring response.

In July 2023, enrollment in the dose escalation portion of the study was completed.

We expect the first interim data from the trial in the second half of 2023.

In the third quarter of 2023, the dose escalation portion of the study was completed with no dose limiting toxicities (“DLTs”) observed.

We are currently planning for cohort expansion which we expect to begin in the first quarter of 2024.

CTX-8371 - a bispecific antibody that simultaneously targets both PD-1 and PD-L1

2 unchanged sentences

In mouse xenografts, treatment with CTX-8371 led to significantly greater tumor growth control and longer survival than treatment with a PD-1 inhibitor alone, a PD-L1 inhibitor alone or the combination of PD-1 and PD-L1 inhibitors.

We completed our first GMP manufacturing campaign for CTX-8371 in the second quarter of 2022.

IND-enabling studies on CTX-8371, including GLP toxicology studies in non-human primates were completed in the first quarter of 2023.

We are currently targeting an IND submission for CTX-8371 to the FDA in the third quarter of 2023 and initiating a clinical trial in the fourth quarter of 2023.

An IND was submitted CTX-8371 to the FDA in the third quarter of 2023.

This IND was accepted and cleared by the FDA in October 2023 and we plan on initiating a clinical trial in the fourth quarter of 2023.

OPERATING ACTIVITIES

We have funded our operations primarily with proceeds from the sale of our equity securities.

Through June 30, 2023, we have received $412 million in gross proceeds from the sale of equity securities.

Through September 30, 2023, we have received $412 million in gross proceeds from the sale of equity securities. 

We have incurred significant operating losses since inception and have not generated any revenue from the sale of products and we do not expect to generate any revenue from the sale of products in the near future, if at all.

Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our treatments and any future product candidates.

Our net losses were $11.3 million and $8.5 million for the three months ended June 30, 2023 and 2022, respectively.

Our net losses were $19.1 million and $15.7 million for the six months ended June 30, 2023 and 2022, respectively.

We had an accumulated deficit of $292 million on June 30, 2023.

Our net losses were $10.0 million and $12.0 million for the three months ended September 30, 2023 and 2022, respectively.

Our net losses were $29.1 million and $27.6 million for the nine months ended September 30, 2023 and 2022, respectively.

We had an accumulated deficit of $301.9 million on September 30, 2023.

We expect to continue to incur significant expenses for at least the next several years as we advance through clinical development, develop additional product candidates and seek regulatory approval of any product candidates that complete clinical development.

2 unchanged sentences

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through equity and debt financings, or other capital sources, which may include collaborations with other companies or other strategic transactions.

As of June 30, 2023, we had $169 million in cash, cash equivalents and marketable securities.

We expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into 2026.

As of September 30, 2023, we had $164 million in cash, cash equivalents and marketable securities.

We expect that such cash resources will enable us to fund our operating expenses and capital expenditure requirements into 2026. 

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.

7 unchanged sentences

These expenses include:

clinical expenses including Contract Research Organizations (“CRO”), consultants that conduct our clinical trials, as well as investigative sites;

manufacturing expenses including Contract Manufacturing Organizations (“CMO”), consultants that are primarily engaged to develop and manufacture drug substance and product for our clinical trials, as well as the cost of acquiring and manufacturing clinical trial materials, including manufacturing registration and validation batches;

employee-related expenses including salaries, related benefits and equity-based compensation expense for employees engaged in research and development functions;

expenses incurred under agreements with organizations that support our platform program development;

Contract Manufacturing Organizations (“CMO”) that are primarily engaged to provide drug substance and product for our clinical trials, research and development programs, as well as investigative sites and consultants that conduct our clinical trials, nonclinical studies and other scientific development services;

the cost of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation batches;

other research and development expenses including pre-clinical study costs and expenses incurred under agreements with organizations that support our platform program development;

costs related to compliance with quality and regulatory requirements;

facilities and equipment expenses.

Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses.

11 unchanged sentences

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 (in thousands):

Three Months Ended June 30,

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 (in thousands):

Three Months Ended September 30,

Operating expenses:

6 unchanged sentences

Research and Development Expenses

Research and development expenses increased by $4.4 million, or 74%, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

The increase primarily came from a $4.6 million increase in program-related expenses, which inherently change over time. 

We spent $5.9 million more on CTX-009 primarily for manufacturing and clinical costs, and $1.3 million less for the other two programs (CTX-471 and CTX-8371) for the three months ended June 30, 2023 as compared to the same period in 2022. 

Research and development expenses decreased by $1.0 million, or 10%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022.

The decrease primarily came from $1.1 million spent in 2022 for toxicological studies related to CTX-8371, which were not incurred in 2023.

We spent $0.3 million more on CTX-009 primarily for manufacturing and clinical costs, and $0.6 million less for the other two programs (CTX-471 and CTX-8371) for the three months ended September 30, 2023 as compared to the same period in 2022. 

We track outsourced development, personnel costs and other research and development costs of specific programs.

Research and development expenses are summarized by program in the table below (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Unallocated research and development expenses

1 unchanged sentence

General and Administrative Expenses

General and administrative expenses remained consistent at $3.1 million for the three months ended June 30, 2023 as compared to the same period in 2022.

For the three months ended June 30, 2023 and 2022, other income consists primarily of interest income.

General and administrative expenses increased by $0.3 million or 10% for the three months ended September 30, 2023 as compared to the same period in 2022, which is from additional stock compensation expense.      

For the three months ended September 30, 2023 and 2022, other income consists primarily of interest income.

Income Tax Expense

During the three months ended June 30, 2023 and 2022, we recognized no income tax expense.

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 (in thousands):

Six Months Ended June 30,

During the three months ended September 30, 2023 and 2022, we recognized no income tax expense.

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 (in thousands):

Nine Months Ended September 30,

Operating expenses:

6 unchanged sentences

Research and Development Expenses

Research and development expenses increased by $6.6 million, or 64%, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

The increase primarily came from an increase in program-related expenses of $7.1 million, which inherently change over time.

We spent $9.3 million more on CTX-009 primarily for manufacturing and clinical costs, and $2.2 million less for the other two programs (CTX-471 and CTX-8371) for the six months ended June 30, 2023 as compared to the same period in 2022.

Research and development expenses increased by $5.6 million, or 28%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

The increase primarily came from an increase in clinical costs of $3.8 million and personnel costs of $1.3 million. 

We spent $9.6 million more on CTX-009 primarily for manufacturing and clinical costs, and $2.8 million less for the other two programs (CTX-471 and CTX-8371) for the nine months ended September 30, 2023 as compared to the same period in 2022.

We track outsourced development, personnel costs and other research and development costs of specific programs.

Research and development expenses are summarized by program in the table below (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Unallocated research and development expenses

1 unchanged sentence

General and Administrative Expenses

General and administrative expenses increased by $0.3 million, or 5%, to $6.2 million for the six months ended June 30, 2023, as compared to the same period in 2022.

For the six months ended June 30, 2023 and 2022, other income consists primarily of interest income.

General and administrative expenses increased by $0.6 million, or 7%, to $9.3 million for the nine months ended September 30, 2023, as compared to the same period in 2022, which is from additional stock compensation expense.    

For the nine months ended September 30, 2023 and 2022, other income consists primarily of interest income.

Income Tax Expense

During the six months ended June 30, 2023 and 2022, we recognized no income tax expense.

During the nine months ended September 30, 2023 and 2022, we recognized no income tax expense.

Liquidity and Capital Resources

1 unchanged sentence

We have funded our operations primarily with proceeds from the sale of our equity securities.

Through June 30, 2023, we have received $412 million in gross proceeds from the sale of equity securities.

As of June 30, 2023, we had cash, cash equivalents and marketable securities of $169 million.

Through June 2023, we sold through our at-the-market (“ATM”) agreement with Jefferies LLC, 951,873 shares of common stock at an average price of $3.28 for total proceeds of $3.1 million and net proceeds of $3.0 million.

Through September 30, 2023, we have received $412 million in gross proceeds from the sale of equity securities.

As of September 30, 2023, we had cash, cash equivalents and marketable securities of $164 million. 

Through September 30, 2023, we sold through our at-the-market (“ATM”) agreement with Jefferies LLC, 951,873 shares of common stock at an average price of $3.28 for total proceeds of $3.1 million and net proceeds of $3.0 million.

Funding Requirements

19 unchanged sentences

The following table shows a summary of our cash flows for the periods indicated (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash used in operating activities

3 unchanged sentences

Operating Activities

During the six months ended June 30, 2023, we used $22.3 million of cash in operating activities, resulting from our net loss of $19.1 million plus the change in operating assets and liabilities of $5.4 million, partially offset by non-cash charges of $2.2 million (primarily from share-based compensation expense of $2.9 million).

During the six months ended June 30, 2022, we used $12.5 million of cash in operating activities, resulting from our net loss of $15.7 million plus the change in operating assets and liabilities of $0.9 million, partially offset by non-cash charges of $4.0 million (primarily from share-based compensation expense of $3.0 million).

During the nine months ended September 30, 2023, we used $28.3 million of cash in operating activities, resulting from our net loss of $29.1 million plus the change in operating assets and liabilities of $2.7 million, partially offset by non-cash charges of $3.5 million.

During the nine months ended September 30, 2022, we used $23.5 million of cash in operating activities, resulting from our net loss of $27.6 million plus the change in operating assets and liabilities of $1.3 million, partially offset by non-cash charges of $5.4 million.

Investing Activities

During the six months ended June 30, 2023, $3.6 million of cash was provided by investing activities, primarily related to the net sale of marketable securities.

During the six months ended June 30, 2022, we used $105.7 million of cash in investing activities which primarily related to the purchase of marketable securities.

During the nine months ended September 30, 2023, $20.7 million of cash was provided by investing activities, primarily related to the net sale of marketable securities.

During the nine months ended September 30, 2022, we used $104.6 million of cash in investing activities which primarily related to the net purchase of marketable securities.

Financing Activities

During the six months ended June 30, 2023, $3.1 million of cash was provided by financing activities.

During the nine months ended September 30, 2023, $3.1 million of cash was provided by financing activities.

This primarily included $3.0 million of net cash from sale of common stock under an ATM Agreement, after issuance costs.

We had no financing activities during the six months ended June 30, 2022.

We had $5 thousand of financing activities during the nine months ended September 30, 2022 resulting from the exercise of stock options.

Future Funding Requirements

15 unchanged sentences

A Phase 2/3 and two Phase 2 clinical trials of CTX-009, a Phase 1b combination trial for CTX-471 and a Phase 1 trial of CTX-8371. 

We expect that we will require additional funding to complete the clinical development of the three programs, commercialize our product candidates, if we receive regulatory approval, and pursue in-licenses or acquisitions of other product candidates.

We expect that we will require additional funding to complete the clinical development of these three programs, commercialize our product candidates, if we receive regulatory approval, and pursue in-licenses or acquisitions of other product candidates.

If we receive regulatory approval for CTX-009, CTX-471 or CTX-8371 or other product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize these product candidates ourselves.

7 unchanged sentences

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