What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-01 compared with 2021-08-02 · 88 added, 73 removed, 151 unchanged (52% of the section changed)

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We are a clinical stage biopharmaceutical company.

Our strategy is to focus our efforts on the development of immune modulator product candidates to treat viral associated cancers, T-cell lymphomas, other cancers and autoimmune diseases.

Our strategy is to focus our efforts on the development of immune modulator product candidates to treat cancers, T-cell lymphomas, and autoimmune diseases.

We have built a pipeline of five programs, three of which are in clinical development.

Our lead product candidate is mupadolimab (formerly CPI-006), a potent humanized monoclonal antibody that is designed to react with a specific site on CD73.

In both preclinical and in vivo studies in cancer patients and patients with COVID-19, mupadolimab has demonstrated binding to various immune cells and the inducement of a humoral adaptive immune response.

In both preclinical and in vivo studies in cancer patients and patients with COVID-19, mupadolimab has demonstrated binding to various immune cells and the inducement of an enhanced humoral immune response.

We believe mupadolimab has the potential to be an important new therapeutic agent with a novel mechanism of action for the treatment of a broad range of cancers and infectious diseases.

In February 2021, we initiated a Phase 3 trial evaluating mupadolimab in a global, randomized, double-blind trial designed to evaluate the efficacy and safety of mupadolimab compared to placebo in hospitalized patients with mild-to-moderate COVID-19.

On July 15, 2021, we announced that we discontinued our Phase 3 clinical trial due to positive trends exhibited by COVID-19 vaccines in lowering serious infection and hospitalization.

The discontinuation is not related to any safety or efficacy issues observed in study patients.

Up to the date of discontinuation, the trial had enrolled 40 patients, who were randomized into one of three arms and received either 1.0 mg/kg or 2.0 mg/kg of mupadolimab, or placebo.

The primary endpoint of the study was to be the proportion of patients that progress to requiring mechanical ventilation or death within 28 days of dosing.

Although the number of patients enrolled in the trial is too small to draw definitive conclusions, we will be analyzing various clinical and laboratory data from the patients enrolled in the trial and plan to report this information later in 2021.

On July 15, 2021, we announced that we discontinued our Phase 3 clinical trial due to positive trends exhibited by COVID-19 vaccines in lowering serious infection and hospitalizations due to COVID-19.

The discontinuation was not related to any safety or efficacy issues observed in the trial patients.

On September 21, 2021, we published preliminary results of our discontinued Phase 3 trial.

The primary endpoint of the trial was the proportion of patients free from respiratory failure or death within 28 days after receiving either mupadolimab 2mg/kg, 1mg/kg or placebo.

Forty patients were enrolled in the clinical trial.

In the 2mg/kg cohort, 93.3% of patients were alive and free from respiratory failure compared to 85.7% in the 1mg/kg cohort and 81.1% in the placebo.

Secondary endpoints also favored mupadolimab treatment cohorts.

Due to the number of participants enrolled in the trial before it was discontinued, the foregoing results were not sufficiently powered for statistical significance.

Mupadolimab is a unique antibody that is designed to bind to a critical epitope involved in B cell signaling.

Our work in both cancer and viral diseases, such as COVID-19, have provided important insights and data into how we may best utilize the biologic properties of our antibody candidate in the clinic.

Across the treatment of cancer and COVID-19, one of the common factors in patients where mupadolimab has shown activity is the presence of viral antigens such as the SARS-CoV-2 virus, or in the case of patients with human papilloma virus (“HPV+”) head and neck cancer, the presence of HPV antigens.

Our studies have uncovered a novel mechanism of action:

mupadolimab is designed to activate B cells which may then be driven into antibody producing plasma cells by the presence of viral antigens within the tumor.

Recent work by two other academic groups have shown that B cells present within the tumors of head and neck cancers produce HPV specific antibodies.

As published in Nature in 2020, other groups have also shown that B cell infiltration in other tumors are strong predictors of response to immunotherapies---more predictive than T cells.

HPV+ head and neck cancers are increasing in incidence in the United States and are now more common than head and neck cancers associated with tobacco use.

mupadolimab is designed to activate B cells which may then be driven into antibody producing plasma cells by the presence of tumor associated antigens within the tumor.

Recent work by two other academic groups have shown that B cells present within the tumors of head and neck cancers produce specific antibodies directed to tumor associated viral antigens.

As published in Nature in 2020, other groups have also shown that B cell infiltration in other tumors are strong predictors of response to immunotherapies.

Human papilloma virus (“HPV+”) head and neck cancers are increasing in incidence in the United States and are now more common than head and neck cancers associated with tobacco use.

From 1990 to 2005 there was a 225% increase in HPV+ head and neck cancers with HPV believed to be the causative factor in approximately 75% of such cancer cases.

HPV is also associated with cervical, anal, vulvar, penis and other cancers.

Reflecting an increase in the importance of HPV+ cancers, they were the subject of this year’s Karnofsky Lecture at the American Society of Clinical Oncology (“ASCO”)

meeting in June 2021.

Reflecting an increase in the importance of HPV+ cancers, they were the subject of this year’s Karnofsky Lecture at the American Society of Clinical Oncology (“ASCO”) meeting in June 2021.

More broadly, many other cancers are believed to be associated with or caused by viruses including hepatoma, lymphomas, brain tumors, skin cancer and others.

We believe that, if successfully developed and approved, mupadolimab’s mechanism and unique properties could position it as new treatment option for these viral associated cancers.

In our ongoing Phase 1/1b cancer clinical trial with mupadolimab, we have observed evidence of anti-tumor activity in oropharyngeal cancers associated with HPV infection.

Based on these findings, during the second quarter, we began enrolling an expansion cohort of up to 15 patients with advanced, HPV+ head and neck cancer that have failed treatment with anti-PD-1 antibodies and chemotherapy.

We believe that, if successfully

developed and approved, mupadolimab’s mechanism and unique properties could position it as new treatment option for these viral associated cancers.

Other tumors, such as non-small cell lung cancer (“NSCLC”), are also thought to contain neoantigens within the tumors.

These antigens are derived from mutations that occur in the cancer cells.

If sufficient immune responses to these antigens can be generated, it could have a beneficial effect on tumor growth or response to therapies.

Various immunotherapies are now approved to enhance immune responses to tumor antigens such as anti-PD1 antibodies.

In our ongoing Phase 1/1b cancer clinical trial with mupadolimab, we have observed evidence of anti-tumor activity in NSCLC and in oropharyngeal head and neck cancers.

In this cohort, mupadolimab will be given in combination with pembrolizumab.

Our goal is to present data from this expansion cohort at a medical meeting later this year.

Our objective in this study is to evaluate response rate.

Our objective is to evaluate response rate in this expansion cohort.

In the third quarter of 2021, we began enrolling an expansion of up to 15 patients with relapsed refractory NSCLC who have failed therapies with anti-PD(L)-1 therapy and chemotherapy.

In this cohort, mupadolimab will be given in combination with pembrolizumab.

Our objective is to evaluate response rate in this expansion cohort.

Our next product candidate, CPI-818, is a selective, covalent inhibitor of ITK and is in a multi-center Phase 1/1b clinical trial in patients with various malignant T-cell lymphomas.

CPI-818 is designed to inhibit the proliferation of certain malignant T-cells, and we believe it also has the potential to regulate the growth of abnormal T-cells involved in autoimmunity.

CPI-818 is currently being studied in a Phase 1/1b clinical in patients with several types of advanced, refractory T cell lymphomas at sites in the United States, Australia, and South Korea.

CPI-818 is currently being studied in a Phase 1/1b clinical trial in patients with several types of advanced, refractory T cell lymphomas at sites in the United States, Australia, and South Korea.

Interim data from the Phase 1/1b clinical trial of CPI-818 for T cell lymphoma demonstrated tumor responses in very advanced, refractory, difficult to treat T cell malignancies.

As of March 4, 2021, and reported in December 2020 at the meeting of the American Society of Hematology, of seven patients with PTCL, there had been one complete response lasting over 15 months and one partial response lasting for over five months;

both responses are ongoing.

Based on interim data from our Phase 1/1b clinical trial, Angel Pharmaceuticals submitted an investigational new drug application (IND) for CPI-818 in July 2021 in China.

If this IND is approved, Angel plans to initiate a Phase 1b/2 clinical trial of CPI-818 for the treatment of refractory T cell lymphomas in late 2021, with the potential to expand into autoimmune diseases over time.

As reported in December 2020 at the meeting of the American Society of Hematology, of seven patients with PTCL, there had been one complete response lasting over 15 months and one partial response lasting for over five months.

In October 2021, Angel Pharmaceuticals received an IND approval notice from the Center for Drug Evaluation (“CDE”) of China for CPI-818.

Angel plans to initiate a Phase 1/1b clinical trial of CPI-818 in China for the treatment of refractory T cell lymphomas in early 2022, with the potential to expand into autoimmune diseases over time.

Our third product candidate, ciforadenant (formerly CPI-444), is an oral, small molecule antagonist of the A2A receptor for adenosine with which we completed a Phase 2 expansion protocol in combination with Genentech, Inc.’s cancer immunotherapy, Tecentriq® (atezolizumab) for patients with either advanced or refractory renal cell cancer (“RCC”).

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We also discovered the Adenosine Gene Signature, which has demonstrated the potential to serve as a biomarker to identify patients most likely to respond to treatment with ciforadenant.

We have refined our strategy with ciforadenant and plan to collaborate with the Kidney Cancer Consortium to evaluate ciforadenant in a Phase 2 clinical trial in first-line therapy for metastatic RCC in combination with pembrolizumab and a tyrosine kinase inhibitor.

The trial is expected to enroll up to 60 patients and is intended to increase complete responses and deep responses in the front-line setting.

Preclinical studies indicate adenosine may be a cause of resistance to current therapies with anti PD(L)-1 and tyrosine kinase inhibitors.

Preclinical studies and data from earlier clinical trials with ciforadenant, indicate adenosine may be a cause of resistance to current therapies with anti PD(L)-1.

Tumor biopsies will be evaluated for expression of the Adenosine Gene Signature.

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We expect to continue to incur significant research and development and general and administrative expenses related to our operations.

Our net loss for the three and six months ended June 30, 2021 was $11.8 million and $23.3 million, respectively.

As of June 30, 2021, we had an accumulated deficit of $246.5 million.

Our net loss for the three and nine months ended September 30, 2021 was $10.7 million and $34.0 million, respectively.

As of September 30, 2021, we had an accumulated deficit of $257.1 million.

We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue our development of, seek regulatory approval for and begin to commercialize mupadolimab, CPI-818 and ciforadenant, and as we develop other product candidates.

Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

Since our inception and through June 30, 2021, we have funded our operations primarily through the sale and issuance of stock.

Since our inception and through September 30, 2021, we have funded our operations primarily through the sale and issuance of stock.

In March 2018, in a follow-on offering, we sold 8,117,647 shares of our common stock at a price of $8.50 per share, which included 1,058,823 shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock.

We received aggregate net proceeds of approximately $64.9 million, after underwriting discounts, commissions and offering expenses.

In February 2021, we completed a follow-on public offering in which we sold 9,783,660 shares of common stock at a price of $3.50 per share, which included 1,212,231

shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock.

In February 2021, we completed a follow-on public offering in which we sold 9,783,660 shares of common stock at a price of $3.50 per share, which included 1,212,231 shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock.

We received aggregate net proceeds of approximately $32.0 million, net of underwriting discounts and commissions and offering expenses.

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Jefferies is entitled to compensation for its services equal to 3.0% of the gross proceeds of any shares of common stock sold through Jefferies under the Sales Agreement.

During the six months ended June 30, 2021, the Company sold 4,264,865 shares under its at-the-market offering program resulting in net proceeds of $11.8 million.

As of June 30, 2021, $36.6 million remained for sale under the Sales Agreement.

During the nine months ended September 30, 2021, we sold 6,609,605 shares under our at-the-market offering program resulting in net proceeds of $29.0 million.

As of September 30, 2021, $18.9 million remained for sale under the Sales Agreement.

In October 2020, we announced the formation and launch of Angel Pharmaceuticals Co., Ltd.

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Under the collaboration, we currently have a 49.7% equity interest in Angel Pharmaceuticals, excluding 7% of Angel’s equity reserved for issuance under the Angel ESOP, and are entitled to designate three individuals on Angel’s five-person Board of Directors.

As of June 30, 2021, we had capital resources consisting of cash, cash equivalents and marketable securities of approximately $66.5 million.

As of September 30, 2021, we had capital resources consisting of cash, cash equivalents and marketable securities of approximately $76.3 million.

We do not expect our existing capital resources to be sufficient to enable us to fund the completion of all of our ongoing or planned clinical trials and remaining development program of any of mupadolimab, CPI-818 or ciforadenant through commercialization.

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COVID-19 has placed strains on the providers of healthcare services, including the healthcare institutions where we conduct our clinical trials.

These strains have resulted in institutions prohibiting the initiation of new clinical trials, enrollment in existing clinical trials and restricting the on-site monitoring of clinical trials.

These strains have resulted in institutions prohibiting the initiation of new clinical

trials, enrollment in existing clinical trials and restricting the on-site monitoring of clinical trials.

We also follow FDA guidance on clinical trial conduct during the COVID-19 pandemic, including the remote monitoring of clinical data.

In alignment with public health guidance designed to slow the spread of COVID-19, as of mid-March 2020, we implemented a reduced onsite staffing model and transitioned to a remote work plan for all employees other than those providing essential services, such as our laboratory staff.

In July 2021, we started transitioning back to office work for

employees not providing essential services.

In July 2021, we started transitioning back to office work for employees not providing essential services.

For our onsite employees, we have implemented heightened health and safety measures designed to comply with applicable federal, state and local guidelines in response to the COVID-19 pandemic.

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Our significant accounting policies are described in Note 2 to our consolidated financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K.

There have been no material changes to our significant accounting policies during the six months ended June 30, 2021.

There have been no material changes to our significant accounting policies during the nine months ended September 30, 2021.

Components of Results of Operations

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Our current planned research and development activities include the following:

● enrollment and completion of our Phase 1/1b clinical trial of mupadolimab in patients with advanced, HPV+ head and neck cancer;

● enrollment and completion of our Phase 1/1b clinical trial of mupadolimab in patients with NSCLC and advanced, HPV+ head and neck cancer;

● enrollment and completion of our ongoing Phase 1/1b clinical trial of CPI-818;

● enrollment and completion of our Phase 2 clinical trials of mupadolimab;

● process development and manufacturing of drug supply of mupadolimab, CPI-818 and ciforadenant;

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses:

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Interest income and other expense, net

Sublease income - related party

Loss from equity method investment

Research and Development Expense

Research and development expenses for the three and six months ended June 30, 2021 and 2020 consisted of the following costs by program (specific program costs consist solely of external costs)(in thousands):

Research and development expenses for the three and nine months ended September 30, 2021 and 2020 consisted of the following costs by program (specific program costs consist solely of external costs)(in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Ciforadenant (formerly CPI-444)

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Unallocated employee and overhead costs

For the three months ended June 30, 2021, the decrease in ciforadenant costs of $0.6 million as compared to the three months ended June 30, 2020, primarily consisted of a decrease of $0.4 million in clinical trial expenses and a decrease of $0.2 million in other outside service costs.

For the six months ended June 30, 2021, the decrease in ciforadenant costs of $1.4 million as compared to the six months ended June 30, 2020, primarily consisted of a decrease of $1.1 million in clinical trial expenses and a decrease of $0.3 million in other outside service costs.

For the three months ended June 30, 2021, the increase in mupadolimab costs of $3.0 million as compared to the three months ended June 30, 2020, primarily consisted of an increase of $2.4 million in clinical trial expenses, an increase of $0.4 million in drug manufacturing costs and in increase of $0.2 million in other outside services associated with the initiation of the Company’s COVID-19 Phase 3 clinical trial.

For the six months ended June 30, 2021, the increase in mupadolimab costs of $4.3 million as compared to the six months ended June 30, 2020, primarily consisted of an increase of $3.3 million in clinical trial expenses, an increase of $0.4 million in licensing expense, an increase of $0.5 million in drug manufacturing costs and in increase of $0.1 million in other outside service costs associated with the initiation of the our COVID-19 Phase 3 clinical trial.

For the three months ended June 30, 2021, the decrease in CPI-818 costs of $0.3 million as compared to the three months ended June 30, 2020, primarily consisted of a decrease in clinical trial expenses.

For the six months ended June 30, 2021, the decrease in CPI-818 costs of $1.1 million as compared to the six months ended June 30, 2020, primarily consisted of a decrease of $0.7 million in clinical trial expenses and a decrease of $0.4 million in drug manufacturing costs.

For the three months ended June 30, 2021, the decrease in other program costs of $0.2 million as compared to the three months ended June 30, 2020, primarily consisted of a decrease in drug manufacturing costs.

For the six months ended June 30, 2021, the decrease in other program costs of $0.8 million as compared to the six months ended June 30, 2020, primarily consisted of a decrease of $0.7 million in drug manufacturing costs and a decrease of $0.1 million in other outside services costs .

For the three months ended June 30, 2021, the decrease in unallocated costs of $0.7 million as compared to the three months ended June 30, 2020, primarily consisted of a decrease of $0.6 million in personnel and related costs and a decrease of $0.1 million in other outside service costs.

For the six months ended June 30, 2021, the decrease in unallocated costs of $1.7 million as compared to the six months ended June 30, 2020, primarily consisted of a decrease of $1.3 million in personnel and related costs and a decrease of $0.4 million in other outside service costs.

For the three months ended September 30, 2021, the decrease in ciforadenant costs of $0.6 million as compared to the three months ended September 30, 2020, primarily consisted of a decrease of $0.5 million in clinical trial expenses.

For the nine months ended September 30, 2021, the decrease in ciforadenant costs of $2.0 million as compared to the nine months ended September 30, 2020, primarily consisted of a decrease of $1.6 million in clinical trial expenses and a decrease of $0.4 million in other outside service costs.

For the three months ended September 30, 2021, the increase in mupadolimab costs of $1.9 million as compared to the three months ended September 30, 2020, primarily consisted of an increase of $1.1 million in clinical trial expenses and an increase of $0.8 million in drug manufacturing costs.

For the nine months ended September 30, 2021, the increase in mupadolimab costs of $6.3 million as compared to the nine months ended September 30, 2020, primarily consisted of an increase of $4.4 million in clinical trial expenses, an increase of $0.4 million in licensing expense, an increase of $1.4 million in drug manufacturing costs and in increase of $0.1 million in other outside service costs.

For the three months ended September 30, 2021, the decrease in CPI-818 costs of $0.1 million as compared to the three months ended September 30, 2020, primarily consisted of a decrease $0.2 million in clinical trial expenses, which were partially offset by an increase of $0.1 million in drug manufacturing costs.

For the nine months ended September 30, 2021, the decrease in CPI-818 costs of $1.2 million as compared to the nine months ended September 30, 2020, primarily consisted of a decrease of $0.9 million in clinical trial expenses, a decrease of $0.2 million in drug manufacturing costs, and a decrease of $0.1 million in other outside service costs.

For the three months ended September 30, 2021, other program costs were negligible.

For the nine months ended September 30, 2021, the decrease in other program costs of $0.8 million as compared to the nine months ended September 30, 2020, primarily consisted of a decrease of $0.7 million in drug manufacturing costs and a decrease of $0.1 million in other outside services costs .

For the three months ended September 30, 2021, the decrease in unallocated costs of $1.0 million as compared to the three months ended September 30, 2020, primarily consisted of a decrease of $0.9 million in personnel and related costs and a decrease of $0.1 million in other outside service costs.

For the nine months ended September 30, 2021, the decrease in unallocated costs of $2.6 million as compared to the nine months ended September 30, 2020, primarily consisted of a decrease of $2.2 million in personnel and related costs and a decrease of $0.4 million in other outside service costs.

General and Administrative Expense

For the three months ended June 30, 2021, the decrease in general and administrative expenses of $0.7 million as compared to the three months ended June 30, 2020, primarily consisted of a decrease of $0.4 million in professional service costs and a decrease of $0.3 million in personnel and related costs.

For the six months ended June 30, 2021, the decrease in general and administrative expenses of $0.6 million as compared to the six months ended June 30, 2020, primarily consisted of a decrease of $0.5 million in personnel and related costs and a decrease of $0.1 million in professional service costs.

For the three months ended September 30, 2021, the decrease in general and administrative expenses of $1.2 million as compared to the three months ended September 30, 2020, primarily consisted of a decrease of $1.0 million in professional service costs and a decrease of $0.2 million in personnel and related costs.

For the nine months ended September 30, 2021, the decrease in general and administrative expenses of $1.7 million as compared to the nine months ended September 30, 2020, primarily consisted of a decrease of $1.0 million in professional service costs and a decrease of $0.7 million in personnel and related costs.

Interest Income and Other Expense, net

For the three months ended June 30, 2021, the decrease in interest income and other expense, net of $0.2 million as compared to the three months ended June 30, 2020, primarily consisted of a decrease in interest income earned due to a decrease in interest rates.

For the six months ended June 30, 2021, the decrease in interest income and other expense, net of $0.5 million as compared to the six months ended June 30, 2020, primarily consisted of a decrease in interest income earned due to a decrease in interest rates.

For the three months ended September 30, 2021, the decrease in interest income and other expense, net of $0.1 million as compared to the three months ended September 30, 2020, primarily consisted of a decrease in interest income earned due to a decrease in interest rates.

For the nine months ended September 30, 2021, the decrease in interest income and other expense, net of $0.5 million as compared to the nine months ended September 30, 2020, primarily consisted of a decrease in interest income earned due to a decrease in interest rates.

Sublease Income – Related Party

For the three and nine months ended September 30, 2021, sublease income of $0.1 million represents rental income associated with our building sublease to Angel Pharmaceuticals.

Loss from equity method investment

For the three months ended June 30, 2021, the loss from equity method investment of $0.5 million represents our share of Angel Pharmaceutical’s loss for the period.

For the six months ended June 30, 2021, the loss from equity method investment of $0.6 million represents our share of Angel Pharmaceutical’s loss for the period.

For the three months ended September 30, 2021, the loss from equity method investment of $1.7 million represents our share of Angel Pharmaceutical’s loss for the period.

For the nine months ended September 30, 2021, the loss from equity method investment of $2.3 million represents our share of Angel Pharmaceutical’s loss for the period.

Liquidity and Capital Resources

As of June 30, 2021, we had cash, cash equivalents and marketable securities of $66.5 million, and an accumulated deficit of $246.5 million, compared to cash and cash equivalents and marketable securities of $44.3 million and an accumulated deficit of $223.1 million as of December 31, 2020.

As of September 30, 2021, we had cash, cash equivalents and marketable securities of $76.3 million, and an accumulated deficit of $257.1 million, compared to cash and cash equivalents and marketable securities of $44.3 million and an accumulated deficit of $223.1 million as of December 31, 2020.

We have financed our operations primarily through private placements of convertible preferred stock and the sale of common stock.

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We received aggregate net proceeds of approximately $64.9 million, after underwriting discounts, commissions and offering expenses.

option to purchase additional shares of common stock.

We received aggregate net proceeds of approximately $32.0 million, net of underwriting discounts and commissions and offering expenses.

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Jefferies is entitled to compensation for its services equal to up to 3.0% of the gross proceeds of any shares of common stock sold through Jefferies under the Sales Agreement.

During the six months ended June 30, 2021, the Company sold 4,264,865 shares under its at-the-market offering program resulting in net proceeds of $11.8 million.

As of June 30, 2021, $36.6 million remained for sale under the Sales Agreement.

We believe our current cash, cash equivalents and marketable securities will be sufficient to fund our planned expenditures and meet our obligations through at least the next twelve months from the issuance of our financial statements as of and for the three and six months ended June 30, 2021.

During the nine months ended September 30, 2021, the Company sold 6,609,605 shares under its at-the-market offering program resulting in net proceeds of $29.0 million.

As of September 30, 2021, $18.9 million remained for sale under the Sales Agreement.

The amounts and timing of our actual expenditures depend on numerous factors, including:

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The following table summarizes our cash flows for the periods indicated (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Net cash provided by (used in):

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Cash Flows from Operating Activities

Cash used in operating activities during the six months ended June 30, 2021 was $21.4 million, which primarily consisted of a net loss of $23.3 million, adjusted by non-cash charges of $3.4 million, primarily consisting of $2.4 million of stock compensation expense, an increase of $1.6 million in prepaid and other current assets and an increase of $0.1 million in accounts payable and accrued and other current liabilities.

Cash used in operating activities during the six months ended June 30, 2020 was $18.8 million, which primarily consisted of a net loss of $23.5 million, adjusted by non-cash charges of $3.5 million, primarily consisting of $3.2 million of stock compensation expense, and an increase of $1.2 million in accounts payable and accrued and other current liabilities.

Cash used in operating activities during the nine months ended September 30, 2021 was $29.9 million, which primarily consisted of a net loss of $34.0 million, adjusted by non-cash charges of $4.6 million, primarily consisting of $3.5 million of stock compensation expense and $2.3 million of loss from equity method investment, an increase of $1.1 million in prepaid and other current assets, an increase of $0.3 million in accounts receivable, a decrease of $0.8 million in accounts payable and accrued and other current liabilities, and an increase in operating lease right-of-use asset of $0.2 million, net of a corresponding increase in operating lease liability.

Cash used in operating activities during the nine months ended September 30, 2020 was $26.6 million, which primarily consisted of a net loss of $33.3 million, adjusted by non-cash charges of $5.0 million, primarily consisting of $4.5 million of stock compensation expense, an increase of $1.6 million in accounts payable and accrued and other current liabilities, and a decrease in prepaid and other current assets of $0.2 million.

Cash Flows from Investing Activities

During the six months ended June 30, 2021, cash provided in investing activities was $20.1 million, which consisted of proceeds from maturities of marketable securities of $24.8 million, partially offset by purchases of marketable securities of $4.7 million.

During the six months ended June 30, 2020, cash provided in investing activities was $34.4 million, which consisted of proceeds from maturities of marketable securities of $63.1 million and proceeds from sales of marketable securities of $1.0 million, partially offset by purchases of marketable securities of $29.7 million.

During the nine months ended September 30, 2021, cash provided in investing activities was $23.6 million, which consisted of proceeds from maturities of marketable securities of $28.4 million, partially offset by purchases of marketable securities of $4.9 million.

During the nine months ended September 30, 2020, cash provided in investing activities was $44.3 million, which consisted of proceeds from maturities of marketable securities of $78.8 million and proceeds from sales of marketable securities of $1.0 million, partially offset by purchases of marketable securities of $35.5 million.

Cash Flows from Financing Activities

During the six months ended June 30, 2021, cash provided by financing activities was $43.8 million, which consisted of $32.0 million in net proceeds from our February 2021 follow-on public offering and $11.8 million in net proceeds from the issuance of common stock through our at-the-market offering program.

During the six months ended June 30, 2020, cash provided by financing activities was negligible.

During the nine months ended September 30, 2021, cash provided by financing activities was $62.1 million, which consisted of $32.0 million in net proceeds from our February 2021 follow-on public offering, $29.0 million in net proceeds from the issuance of common stock through our at-the-market offering program, and $1.2 million in proceeds from the exercise of stock options.

During the nine months ended September 30, 2020, cash provided by financing activities was $0.1 million, which consisted of proceeds from the exercise of stock options.

Contractual Obligations

There have been no material changes outside the ordinary course of our business to our contractual obligations during the six months ended June 30, 2021, as compared to those disclosed in our Annual Report on Form 10-K.

There have been no material changes outside the ordinary course of our business to our contractual obligations during the nine months ended September 30, 2021, as compared to those disclosed in our Annual Report on Form 10-K.

JOBS Act Accounting Election

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Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

We have irrevocably elected not to avail ourselves of this

exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We also rely on other exemptions provided by the JOBS Act, including, without limitation, providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act.

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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