What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-03 compared with 2022-08-08 · 79 added, 71 removed, 177 unchanged (46% of the section changed)

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CPI-818 is currently being studied in a Phase 1/1b clinical trial that was designed to select the recommended Phase 2 clinical trial dose of CPI-818 and evaluate its safety, pharmacokinetics, target occupancy, immunologic effects, biomarkers and efficacy.

The study employs an adaptive, expansion cohort design, with an initial phase that evaluated escalating doses (100, 200, 400, 600 mg taken twice a day) in successive cohorts of patients, followed by a second phase that is designed to evaluate safety and tumor response to the recommended dose of CPI-818 in disease-specific patient cohorts.

The study employs an adaptive, expansion cohort design, with an initial phase that evaluated escalating oral doses (100, 200, 400, 600 mg taken twice a day) in successive cohorts of patients, followed by a second phase that is designed to evaluate safety and tumor response to the recommended dose of CPI-818 in disease-specific patient cohorts.

By protocol design, treatment is discontinued after one year or upon disease progression.

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Th1 cells are required for immunity to tumors, viral infections and other infectious diseases.

Th2 helper T cells are involved in the pathogenesis of many autoimmune and allergic diseases.

Th2 helper T cells are responsible for the production of several disease causing cytokines involved in autoimmunity and allergy.

The immunologic effects of CPI-818 lead to what is known as Th1 skewing and is made possible by the high selectivity of the drug for ITK.

In some patients, a decrease in blood eosinophil count has been observed, consistent with blockade of Th2 cells.

We and Angel Pharmaceuticals are now enrolling additional patients with T cell lymphoma in the 200 mg cohort.

As of July 22, 2022, in the 200 mg cohort, 12 patients have been enrolled and eight are evaluable for response.

As of July 22, 2022, there has been one complete response (CR) lasting 25 months;

As of July 22, 2022, 12 patients were enrolled in the 200 mg cohort and eight were evaluable for response.

As of July 22, 2022, there had been one complete response (“CR”) lasting 25 months;

one nodal CR lasting 16 months;

one partial response (“PR”) ongoing at two months follow up.

As of July 22, 2022, five patients had stable disease (SD), two of the patients with SD have been on treatment for approximately 12 weeks and continue on study.

Two additional patients are on treatment and have not yet had their disease monitoring assessments.

As of July 22, 2022, five patients had stable disease (“SD”), two of the patients with SD had been on treatment for approximately 12 weeks and continued on study.

Two additional patients were on treatment and had not yet had their disease monitoring assessments.

An additional patient in the 600 mg cohort also had a PR.

We and Angel Pharmaceuticals continue to enroll additional patients with T cell lymphomas in the 200 mg cohort of the clinical trial.

Analysis of blood in four of four patients treated in the 200 mg cohort showed increases in Th1 cells compared to baseline and increases in terminally differentiated T effector memory cells, which are T cells that are antigen primed and capable of destroying tumor cells.

A tumor biopsy from one patient taken during response demonstrated an increase in T effector memory cells in the tumor.

Several patients with high baseline, pretreatment eosinophil counts showed reductions in circulating eosinophils during treatment with CPI-818.

Three of three patients with high baseline, pretreatment eosinophil counts showed reductions in circulating eosinophils during treatment with CPI-818.

Eosinophils are white blood cells that play a key role in allergic and autoimmune diseases, and they are often elevated in patients with T Cell lymphomas (“TCL”).

We expect to present additional data from this clinical trial later this year.

We expect to present additional data from this clinical trial at the 64th American Society of Hematology (ASH) Annual Meeting and Exposition in December.

We are also developing CPI-818 for autoimmune and allergic diseases and we are preparing to initiate potential clinical trials for certain autoimmune diseases.

CPI-818 has demonstrated activity in various animal models of autoimmunity including models of systemic lupus erythematosus, psoriasis, inflammatory bowel disease and graft versus host disease.

Some of the research detailing this activity was presented at the annual meetings of the American Society of Hematology in 2020 and 2021.

Our second product candidate, ciforadenant, 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 we believe has demonstrated the potential to serve as a biomarker to identify patients most likely to respond to treatment with ciforadenant.

The results of our Phase 1/1b

clinical trial involving 68 patients with RCC were published in the journal Cancer Discovery in January 2020.

The results of our Phase 1/1b clinical trial involving 68 patients with RCC were published in the journal Cancer Discovery in January 2020.

This study reported that in 30 patients evaluated for the Adenosine Gene Signature, no patients showing a low Adenosine Gene Signature exhibited signs of tumor regression while 17% (3 of 18) of patients with a high Adenosine Gene Signature had an overall response rate by RECIST criteria.

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 advanced RCC in combination with ipilimumab and nivolumab.

The trial is expected to enroll approximately 60 patients.

The endpoint of the clinical trial is expected to be deep response rate defined as greater than 50% reduction of tumor volume.

Based on these results, we are collaborating with the Kidney Cancer Research Consortium to evaluate ciforadenant in an open label Phase 1b/2 clinical trial as a first line therapy for metastatic RCC in combination with ipilimumab (anti-CTLA-4) and nivolumab (anti-PD-1).

The clinical trial is expected to enroll approximately 60 patients.

In the Phase 1b portion of the clinical trial (N=8), the primary endpoints are safety, tolerability and anti-tumor activity.

In the Phase 2 portion of the clinical trial, the primary endpoint is the percent of patients that achieve a deep response, defined as complete response or depth of partial response of >50% tumor reduction.

Historical data has shown that deep responses correlate with prolonged progression free survival and is seen in approximately 32% of patients receiving ipilimumab and nivolumab.

Deep response rates in renal cell cancer have been found to correlate with long term progression free survival.

The Adenosine Gene Signature biomarker also will be evaluated in tumor biopsy specimens.

The trial design is based on our preclinical research published in 2018 in Cancer Immunology Research that demonstrated impressive antitumor control and cures in several animal models using ciforadenant in combination with anti-CTLA4 and anti-PD1.

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

The Kidney Cancer Research Consortium is comprised of a group of leading cancer centers in the United States led by investigators at MD Anderson.

Our third product candidate is mupadolimab, a humanized monoclonal antibody that is designed to react with a specific site on CD73.

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At the 2021 Annual Meeting of the Society for Immunotherapy of Cancer (“SITC”) in November 2021, we presented interim data demonstrating anti-tumor activity in NSCLC and head and neck cancer (“HNSCC”) patients treated with 12 mg/kg or greater of mupadolimab as a single agent, in combination with ciforadenant, in combination with pembrolizumab or in combination with pembrolizumab and ciforadenant.

These patients had advanced refractory disease and failed a median of three prior therapies.

These patients had advanced refractory

disease and failed a median of three prior therapies.

Further, all but one had failed therapy with prior anti PD(L)-1 antibodies.

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We have completed enrollment in two Phase 1/1b clinical trial expansion cohorts of patients with (1) HNSCC that have failed previous treatment with anti-PD-1 therapy and chemotherapy and (2) relapsed refractory NSCLC who have failed previous treatment with anti-PD(L)-1 therapy and chemotherapy.

We will not initiate a planned randomized Phase 2 clinical trial evaluating mupadolimab in combination with pembrolizumab and chemotherapy as a front-line therapy for the treatment of patients with advanced NSCLC this year.

The delay is based on our plan to conserve capital and focus on advancing our T cell lymphoma and autoimmunity programs with CPI-818.

We believe the mupadolimab program is well-positioned to re-enter clinical trials and we may reinitiate such clinical activity depending on any changes to our clinical development strategy.

Notwithstanding our strategic decision, Angel Pharmaceuticals plans to continue the development of mupadolimab in China.

In July 2022, the Center for Drug Evaluation in China accepted for

filing the Investigational New Drug application (“IND”) to initiate a Phase 1 trial with mupadolimab alone and together with pembrolizumab in patients with advanced NSCLC and HNSCC.

This study is planned to be conducted by Angel Pharmaceuticals.

Based on the available results from this trial, we believe this program is ready to advance into a randomized Phase 2 clinical trial evaluating mupadolimab in combination with pembrolizumab and chemotherapy as a front-line therapy for the treatment of patients with NSCLC.

However, we are delaying the initiation of this clinical trial in order to prioritize the development of CPI-818 and to conserve capital.

Angel Pharmaceuticals plans to continue the development of mupadolimab in China.

The CDE (Center for Drug Evaluation) has approved an investigational new drug application (“IND”) to initiate a Phase 1 trial in China with mupadolimab alone and together with pembrolizumab in patients with advanced NSCLC and head and neck cancer.

To date, the majority of our efforts have been focused on the research, development and advancement of CPI-818, ciforadenant, and mupadolimab, and we have not generated any revenue from product sales and, as a result, we have incurred significant losses.

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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, 2022 was $8.4 million and $16.7 million, respectively.

As of June 30, 2022, we had an accumulated deficit of $283.0 million.

Our net loss for the three and nine months ended September 30, 2022 was $14.8 million and $31.5 million, respectively.

As of September 30, 2022, we had an accumulated deficit of $297.9 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 CPI-818, ciforadenant and mupadolimab, 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, 2022, we have funded our operations primarily through the sale and issuance of stock, including through our initial public offering (“IPO”) in March 2016, in which we raised net proceeds of approximately $70.6 million, a follow-on offering of our common stock in March 2018, in which we raised net proceeds of approximately $64.9 million and a follow on offering in February 2021, in which we raised net proceeds of approximately $32.0 million, in each case net of underwriting discounts and commissions and offering expenses.

Immediately prior to the consummation of the IPO, all of our outstanding shares of convertible preferred stock were converted into 14.3 million shares of our common stock.

Since our inception and through September 30, 2022, we have funded our operations primarily through the sale and issuance of stock, including through our initial public offering (“IPO”) in March 2016, in which we raised net proceeds of approximately $70.6 million, a follow-on offering of our common stock in March 2018, in which we raised net proceeds of approximately $64.9 million and a follow on offering in February 2021, in which we raised net proceeds of approximately $32.0 million, in each case net of underwriting discounts and commissions and offering expenses.

Immediately prior to the consummation of the IPO, all of our outstanding shares of redeemable convertible preferred stock were converted into 14.3 million shares of our common stock.

In March 2020, we entered into an open market sale agreement (the “2020 Sales Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of the Company’s common stock, from time-to-time, with aggregate gross sales proceeds of up to $50,000,000, through an at-the-market equity offering program under which Jefferies will act as our sales agent.

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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 2020 Sales Agreement and 2021 Sales Agreement.

During the six months ended June 30, 2022, we did not sell any shares under our at-the-market offering program.

As of June 30, 2022, we had sold 6,920,339 shares of common stock for gross proceeds of $31.1 million under the 2020 Sales Agreement, and $18.9 million and $40.0 million remained for sale under the 2020 Sales Agreement and 2021 Sales Agreement, respectively.

As of June 30, 2022, we had capital resources consisting of cash, cash equivalents and marketable securities of approximately $56.7 million.

While we believe that our current cash, cash equivalents and short-term marketable securities will be sufficient to fund our planned operations for at least 12 months from the date of the issuance of these financial statements, 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 CPI-818, ciforadenant or mupadolimab through commercialization.

During the nine months ended September 30, 2022, we did not sell any shares under our at-the-market offering program.

As of September 30, 2022, we had sold 6,920,339 shares of common stock for gross proceeds of $31.1 million under the 2020 Sales Agreement.

As of September 30, 2022, $18.9 million and $40.0 million remained for sale under the 2020 Sales Agreement and 2021 Sales Agreement, respectively.

As of September 30, 2022, we had capital resources consisting of cash, cash equivalents and marketable securities of approximately $49.6 million.

818, ciforadenant or mupadolimab through commercialization.

In addition, our operating plan may change as a result of many factors, including those described in the section of this report entitled “Risk Factors” and others currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity, debt financings or other sources, such as strategic collaborations.

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Our significant accounting policies are described in Note 2 to our consolidated financial statements for the year ended December 31, 2021 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, 2022.

There have been no material changes to our significant accounting policies during the nine months ended September 30, 2022.

Components of Results of Operations

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Our current planned research and development activities include the following:

● 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 planned Phase 2 clinical trial with ciforadenant in collaboration with the Kidney Cancer Clinical Trials Consortium;

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

● planned enrollment and completion of clinical trials of CPI-818 for the treatment of certain autoimmune diseases;

● enrollment and completion of our planned Phase 1b/2 clinical trial with ciforadenant in collaboration with the Kidney Cancer Research Consortium;

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

● preclinical studies under our other programs in order to select development product candidates.

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating expenses:

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Research and Development Expenses

Research and development expenses for the three and six months ended June 30, 2022 and 2021 consisted of the following costs by program and unallocated employee costs and overhead costs (specific program costs consist solely of external costs) (in thousands):

Research and development expenses for the three and nine months ended September 30, 2022 and 2021 consisted of the following costs by program as well as unallocated employee costs and overhead costs (specific program costs consist solely of external costs) (in thousands):

Three Months Ended

Six Months Ended

Ciforadenant (formerly CPI-444)

Mupadolimab (formerly CPI‑006)

Nine Months Ended

September 30,

Unallocated employee and overhead costs

For the three months ended June 30, 2022, the decrease in ciforadenant costs of $0.1 million as compared to the three months ended June 30, 2021, primarily consisted of a decrease of $0.2 million in clinical trial expenses, which were partially offset by an increase of $0.1 million in drug manufacturing costs.

For the six months ended June 30, 2022, the increase in ciforadenant costs of $0.1 million as compared to the six months ended June 30, 2021, primarily consisted of an increase of $0.3 million in drug manufacturing costs and an increase of $0.1 million in other outside service costs, which were partially offset by a decrease of $0.3 million in clinical trial expenses.

For the three months ended June 30, 2022, the decrease in mupadolimab costs of $3.5 million as compared to the three months ended June 30, 2021, primarily consisted of a decrease of $3.7 million in clinical trial expenses and a decrease of $0.3 million in other outside service costs, which were partially offset by an increase of $0.5 million in drug manufacturing costs.

For the six months ended June 30, 2022, the decrease in mupadolimab costs of $5.7 million as compared to the six months ended June 30, 2021, primarily consisted of a decrease of $5.7 million in clinical trial expenses, a decrease of $0.4 million in licensing expense and a decrease of $0.3 million in other outside service costs, which were partially offset by an increase of $0.7 million in drug manufacturing costs.

For the three months ended June 30, 2022, the increase in CPI-818 costs of $0.4 million as compared to the three months ended June 30, 2021, primarily consisted of an increase of $0.3 million in drug manufacturing costs and an increase of $0.1 million in clinical trial expenses.

For the six months ended June 30, 2022, the increase in CPI-818 costs of $0.5 million as compared to the six months ended June 30, 2021, primarily consisted of an increase of $0.3 million in drug manufacturing costs, an increase of $0.1 million in clinical trial expenses and an increase of $0.1 million in other outside service costs.

For the three months ended June 30, 2022, the decrease in unallocated costs of $1.1 million as compared to the three months ended June 30, 2021, primarily consisted of a decrease of $1.0 million in personnel and related costs and a decrease of $0.3 million in facility related expenses, which were partially offset by an increase of $0.2 million in other outside service costs.

For the six months ended June 30, 2022, the decrease in unallocated costs of $2.2 million as compared to the six months ended June 30, 2021, primarily consisted of a decrease of $2.0 million in personnel and related costs and a decrease of $0.3 million in facility related expenses, which were partially offset by an increase of $0.1 million in other outside service costs

For the three months ended September 30, 2022, the increase in CPI-818 costs of $0.3 million as compared to the three months ended September 30, 2021, primarily consisted of an increase of $0.3 million in outside service costs and an increase of $0.1 million in drug manufacturing costs, which were partially offset by a decrease of $0.1 million in clinical trial expenses.

For the nine months ended September 30, 2022, the increase in CPI-818 costs of $0.8 million as compared to the nine months ended September 30, 2021, primarily consisted of an increase of $0.4 million in drug manufacturing costs and an increase of $0.4 million in other outside service costs.

For the three months ended September 30, 2022, the decrease in ciforadenant costs of $0.1 million as compared to the three months ended September 30, 2021, primarily consisted of a decrease of $0.2 million in clinical trial expenses, which were partially offset by an increase of $0.1 million in other outside service costs.

For the nine months ended September 30, 2022, the decrease in ciforadenant costs of $0.1 million as compared to the nine months ended September 30, 2021, primarily consisted of a decrease of $0.5 million in clinical trial expenses, which were partially offset by an increase of $0.3 million in drug manufacturing costs and an increase of $0.1 million in other outside service costs.

For the three months ended September 30, 2022, the increase in mupadolimab costs of $3.3 million as compared to the three months ended September 30, 2021, primarily consisted of an increase of $5.4 million in drug manufacturing costs as a result of the purchase of antibody for our clinical trial for mupadolimab, which was subsequently paused, under a non-cancelable purchase commitment, which were partially offset by a decrease of $1.9 million in clinical trial expenses and a decrease of $0.2 million in other outside service costs.

For the nine months ended September 30, 2022, the decrease in mupadolimab costs of $2.4 million as compared to the nine months ended September 30, 2021, primarily consisted of a decrease of $7.6 million in clinical trial expenses, a decrease of $0.4 million in licensing expense and a decrease of $0.5 million in other outside service costs, which were partially offset by an increase of $6.1 million in drug manufacturing costs as a result of the purchase of antibody for our clinical trial for mupadolimab, which was subsequently paused, under a non-cancelable purchase commitment.

For the three months ended September 30, 2022, the decrease in unallocated costs of $0.1 million as compared to the three months ended September 30, 2021, primarily consisted of a decrease of $0.3 million in personnel and related costs, which were partially offset by an increase of $0.2 million in other outside service costs.

For the nine months ended September 30, 2022, the decrease in unallocated costs of $2.3 million as compared to the nine months ended September 30, 2021, primarily consisted of a decrease of $2.3 million in personnel and related costs and a decrease of $0.3 million in facility related expenses, which were partially offset by an increase of $0.3 million in other outside service costs.

General and Administrative Expense

For the three months ended June 30, 2022, the decrease in general and administrative expenses of $0.1 million as compared to the three months ended June 30, 2021, primarily consisted of a decrease of $0.1 million in personnel and related costs.

For the six months ended June 30, 2022, the decrease in general and administrative expenses of $1.0 million as compared to the six months ended June 30, 2021, primarily consisted of a decrease of $0.8 million in personnel and related costs and a decrease of $0.2 million in professional service costs

For the three months ended September 30, 2022, the increase in general and administrative expenses of $0.1 million as compared to the three months ended September 30, 2021, primarily consisted of an increase of $0.4 million in professional service costs, which were partially offset by a decrease of $0.3 million in personnel and related costs.

For the nine months ended September 30, 2022, the decrease in general and administrative expenses of $1.0 million as compared to the nine months ended September 30, 2021, primarily consisted of a decrease of $1.2 million in personnel and related costs, which were partially offset by an increase of $0.2 million in professional service costs.

Interest Income and Other Expense, net

For the three months ended June 30, 2022, the increase in interest income and other expense, net of $0.1 million as compared to the three months ended June 30, 2021, primarily consisted of additional interest income earned due to a higher rate of return on investments.

For the six months ended June 30, 2022, the increase in interest income and other expense, net of $0.1 million as compared to the six months ended June 30, 2021, primarily consisted of additional interest income earned due to a higher rate of return on investments

For the three months ended September 30, 2022, the increase in interest income and other expense, net of $0.2 million as compared to the three months ended September 30, 2021, primarily consisted of additional interest income earned due to a higher rate of return on investments.

For the nine months ended September 30, 2022, the increase in interest income and other expense, net of $0.3 million as compared to the nine months ended September 30, 2021, primarily consisted of additional interest income earned due to a higher rate of return on investments.

Sublease Income – Related Party

For the three and six months ended June 30, 2022, sublease income of $0.1 million and $0.3 million, respectively, represents rental income associated with our building sublease to Angel Pharmaceuticals.

For the three and nine months ended September 30, 2022, sublease income of $0.1 million and $0.4 million, respectively, represents rental income associated with our building sublease to Angel Pharmaceuticals.

Loss from equity method investment

For the three months ended June 30, 2022, the increase in loss from equity method investment of $1.6 million as compared to the three months ended June 30, 2021, primarily consisted of an increase in our share of Angel Pharmaceutical’s loss for the three months ended June 30, 2022.

For the six months ended June 30, 2022, the increase in loss from equity method investment of $2.6 million as compared to the six months ended June 30, 2021, primarily consisted of an increase in our share of Angel Pharmaceutical’s loss for the six months ended June 30, 2022

For the three months ended September 30, 2022, the increase in loss from equity method investment of $1.0 million as compared to the three months ended September 30, 2021, primarily consisted of an increase in our share of Angel Pharmaceutical’s loss for the three months ended September 30, 2022.

For the nine months ended September 30, 2022, the increase in loss from equity method investment of $3.1 million as compared to the nine months ended September 30, 2021, primarily consisted of an increase in our share of Angel Pharmaceutical’s loss for the nine months ended September 30, 2022

Liquidity and Capital Resources

As of June 30, 2022, we had cash, cash equivalents and marketable securities of $56.7 million, and an accumulated deficit of $283.0 million, compared to cash and cash equivalents and marketable securities of $69.5 million

and an accumulated deficit of $266.4 million as of December 31, 2021.

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

Since our inception and through June 30, 2022, we have funded our operations primarily through the sale and issuance of stock, including through our IPO in March 2016, in which we raised net proceeds of approximately $70.6 million, a follow-on offering of our common stock in March 2018, in which we raised net proceeds of approximately $64.9 million and a follow on offering in February 2021, in which we raised net proceeds of approximately $32.0 million, in each case net of underwriting discounts and commissions and offering expenses.

As of September 30, 2022, we had cash, cash equivalents and marketable securities of $49.6 million, and an accumulated deficit of $297.9 million, compared to cash and cash equivalents and marketable securities of $69.5 million and an accumulated deficit of $266.4 million as of December 31, 2021.

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

Since our inception and through September 30, 2022, we have funded our operations primarily through the sale and issuance of stock, including through our IPO in March 2016, in which we raised net proceeds of approximately $70.6 million, a follow-on offering of our common stock in March 2018, in which we raised net proceeds of approximately $64.9 million and a follow on offering in February 2021, in which we raised net proceeds of approximately $32.0 million, in each case net of underwriting discounts and commissions and offering expenses.

In March 2020, we entered into the 2020 Sales Agreement with Jefferies to sell shares of the Company’s common stock, from time-to-time, with aggregate gross sales proceeds of up to $50,000,000, through an at-the-market equity offering program under which Jefferies will act as our sales agent.

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During the six months ended June 30, 2022, we did not sell any shares under our at-the-market offering program.

As of June 30, 2022, we had sold 6,920,339 shares of common stock for gross proceeds of $31.1 million under the 2020 Sales Agreement and $18.9 million and $40.0 million remained for sale under the 2020 Sales Agreement and 2021 Sales Agreement, respectively.

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 months ended June 30, 2022.

During the nine months ended September 30, 2022, we did not sell any shares under our at-the-market offering program.

As of September 30, 2022, we had sold 6,920,339 shares of common stock for gross proceeds of $31.1 million under the 2020 Sales Agreement.

As of September 30, 2022, $18.9 million and $40.0 million remained for sale under the 2020 Sales Agreement and 2021 Sales Agreement, respectively.

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

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In addition, sufficient additional funding may not be available on acceptable terms, or at all.

If we are not

able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned programs.

If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned programs.

Any of these actions could have a material effect on our business, financial condition and results of operations.

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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, 2022 was $12.5 million, which primarily consisted of a net loss of $16.7 million, adjusted by non-cash charges of $4.3 million, that primarily consisted of $1.4 million of stock compensation expense and $2.6 million of loss from equity method investment, an increase of $0.4 million in prepaid and other current assets, a decrease of $0.1 million in accounts receivable, an increase of $0.8 million in accounts payable and a decrease of $0.7 million in accrued and other current liabilities.

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 nine months ended September 30, 2022 was $19.5 million, which primarily consisted of a net loss of $31.5 million, adjusted by non-cash charges of $7.7 million, that primarily consisted of $2.1 million of stock compensation expense and $5.4 million of loss from equity method investment, a decrease of $0.2 million in prepaid and other current assets, an increase of $2.7 million in accounts payable, an increase of $1.5 million in accrued and other current liabilities and a decrease of $0.1 million in operating lease liability net of operating lease right-of-use asset amortization.

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 Flows from Investing Activities

During the six months ended June 30, 2022, cash used in investing activities was $22.4 million, that consisted of purchases of marketable securities of $29.4 million, which were partially offset by proceeds from maturities of marketable securities of $7.0 million.

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 nine months ended September 30, 2022, cash used in investing activities was $19.4 million, which primarily consisted of purchases of marketable securities of $46.9 million and purchases of property and equipment of $0.3 million, which were partially offset by proceeds from maturities of marketable securities of $27.8 million.

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

Cash Flows from Financing Activities

During the six months ended June 30, 2022, there were no 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 nine months ended September 30, 2022, there were no cash flows from financing activities.

During the nine months ended September 30, 2021, cash provided by financing activities was $62.1 million, which primarily 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.

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, 2022, 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, 2022, as compared to those disclosed in our Annual Report on Form 10-K.

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