What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-28 compared with 2022-03-10 · 54 added, 48 removed, 179 unchanged (36% 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 with the potential to treat solid cancers, T-cell lymphomas, autoimmune diseases and infectious diseases.

Our strategy is to focus our efforts on the development of immune modulator product candidates with the potential to treat solid cancers, T cell lymphomas, autoimmune, allergic and infectious 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 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 enhancement of immune responses by activating B cells.

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.

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 and allergy.

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”).

Ciforadenant is designed to disable a tumor’s ability to subvert attack by the immune system by blocking the binding of immunosuppressive adenosine in the tumor microenvironment to the A2A receptor.

Our lead product candidate is CPI-818, 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 also to affect the differentiation of normal T cells, which could enhance immunity to tumor cells, We believe these properties have the potential to regulate the growth and activity of abnormal T cells involved in autoimmunity and allergy.

Our second product candidate, ciforadenant, is an oral, small molecule antagonist of the A2A receptor for adenosine designed to disable a tumor’s ability to subvert attack by the immune system by blocking the binding of immunosuppressive adenosine in the tumor microenvironment to the A2A receptor.

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)

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

In both preclinical and in vivo studies, mupadolimab has demonstrated binding to various immune cells and the enhancement of immune responses by activating B cells.

While 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, we are waiting to initiate a potential Phase 2 randomized clinical trial in order to prioritize the development of our other two lead product candidates.

Angel Pharmaceuticals is continuing the development of mupadolimab in China and is enrolling patients in a Phase 1 trial with mupadolimab alone and together with pembrolizumab in patients with advanced NSCLC and head and neck cancer.

Our molecularly targeted product candidates are designed to exhibit a high degree of specificity, which we believe has the potential to provide greater safety compared to other cancer therapies and may facilitate their development either as monotherapies or in combination with other cancer therapies such as immune checkpoint inhibitors or chemotherapy.

We believe the breadth and status of our pipeline demonstrates our management team’s expertise in understanding and developing immunology focused assets as well as in identifying product candidates that can be in-licensed and further developed internally to treat many types of cancer.

Our diverse and versatile product candidates have also enabled us to address opportunities in foreign markets.

We hold worldwide rights to all of our product candidates (other than in greater China).

Our diverse and versatile product candidates have also enabled us to address markets in foreign markets.

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

(“Angel Pharmaceuticals”), a new China based biopharmaceutical company with a mission to bring innovative quality medicines to Chinese patients for treatment of serious diseases including cancer, autoimmune diseases and infectious diseases.

We formed Angel Pharmaceuticals as a wholly owned subsidiary and it launched with a post-money valuation of approximately $106.0 million, based on an approximate $41.0 million cash investment from a Chinese investor group that includes funds associated with Tigermed and Betta Pharmaceuticals, Hisun Pharmaceuticals and Zhejiang Puissance Capital.

We formed Angel Pharmaceuticals as a wholly owned subsidiary and it launched with a post-money valuation of approximately $106.0

million, based on an approximate $41.0 million cash investment from a Chinese investor group that includes funds associated with Tigermed and Betta Pharmaceuticals, Hisun Pharmaceuticals and Zhejiang Puissance Capital.

Such cash is not available for our use.

Contemporaneously with the financing, Angel Pharmaceuticals licensed the rights to develop and commercialize our three clinical-stage candidates – mupadolimab, CPI-818 and ciforadenant – in greater China and obtained global rights to our BTK inhibitor preclinical programs.

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 Employee Stock Ownership Plan (“ESOP”), and are entitled to designate three individuals on Angel’s five-person Board of Directors.

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

Contemporaneously with the financing, Angel Pharmaceuticals licensed the rights to develop and commercialize our three clinical-stage candidates – CPI-818, ciforadenant and mupadolimab – in greater China and obtained global rights to our BTK inhibitor preclinical programs.

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 Employee Stock Ownership Plan (“ESOP”), and are entitled to designate three individuals on Angel’s five-person Board of Directors.

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.

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

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As of December 31, 2022, we had an accumulated deficit of $307.7 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.

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.

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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 year ended December 31, 2021, we sold 6,609,605 shares under our at-the-market offering program resulting in net proceeds of $29.0 million.

During the year ended December 31, 2022, we did not sell any shares under our at-the-market offering program.

As of December 31, 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 December 31, 2022, $18.9 million remained for sale under the 2020 Sales Agreement and $40.0 million remained for sale under the 2021 Sales Agreement.

As of December 31, 2022, we had capital resources consisting of cash, cash equivalents and marketable securities of approximately $42.3 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 mupadolimab, CPI-818 or ciforadenant through commercialization.

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.

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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In addition, additional funding may not be available to us on acceptable terms or at all and any additional fundraising efforts may divert our management from its day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates.

Furthermore, even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to favorable market conditions or strategic considerations.

even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to favorable market conditions or strategic considerations.

We currently have no manufacturing capabilities and do not intend to establish any such capabilities.

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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 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 trial of mupadolimab;

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

● a potential registration clinical trial for CPI-818;

● enrollment and completion of our 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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The process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming, and the successful development of our product candidates is uncertain.

The risks and uncertainties associated with our research and development projects are discussed more fully in “Part I, Item 1A—Risk Factors.” As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval.

The risks and uncertainties associated with our research and development projects are discussed more fully in “Part II, Item 1A—Risk Factors.” As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval.

We may never succeed in achieving regulatory approval for any of our product candidates.

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Interest income and other expense, net

Gain from sale of property and equipment

Gain on deconsolidation of Angel Pharmaceuticals

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Year ended December 31,

Ciforadenant (formerly CPI-444)

Mupadolimab (formerly CPI‑006)

Other programs

Unallocated employee and overhead costs

For the year ended December 31, 2021, the decrease in ciforadenant costs of $2.3 million as compared to the year ended December 31, 2020, primarily consisted of a decrease of $1.9 million in clinical trial expenses and a decrease of $0.5 million in other outside services, partially offset by an increase of $0.1 million in drug manufacturing costs.

For the year ended December 31, 2021, the increase in mupadolimab costs of $5.2 million as compared to the year ended December 31, 2020, primarily consisted of an increase of $3.1 million in clinical trial expenses, an increase of $1.8 million in drug manufacturing costs as well as an increase of $0.3 million in other outside services.

For the year ended December 31, 2022, the increase in CPI-818 costs of $2.9 million as compared to the year ended December 31, 2021, primarily consisted of an increase of $1.1 million in manufacturing costs, an increase of $0.3 million in clinical trial expenses and an increase of $0.9 million in other outside services.

Additionally, $0.6 million in drug manufacturing costs, which were expensed in prior years, were billed to Angel Pharmaceuticals during the year ended December 31, 2021.

For the year ended December 31, 2022, the decrease in ciforadenant costs of $0.2 million as compared to the year ended December 31, 2021, primarily consisted of a decrease of $0.5 million in clinical trial expenses, which was partially offset by an increase of $0.1 million in drug manufacturing costs and an increase of $0.2 million in other outside services.

For the year ended December 31, 2022, the decrease in mupadolimab costs of $4.4 million as compared to the year ended December 31, 2021, primarily consisted of a decrease of $8.6 million in clinical trial expenses and a decrease of $1.0 million in other outside services, which was partially offset by an increase of $5.7 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.

Additionally, $0.5 million in drug manufacturing costs, which were expensed in prior years, were billed to Angel Pharmaceuticals during the year ended December 31, 2022.

For the years ended December 31, 2022, the decrease in costs related to other programs compared to the year ended December 31, 2021, was negligible.

For the year ended December 31, 2022, the decrease in unallocated costs of $3.0 million as compared to the year ended December 31, 2021, primarily consisted of a decrease of $3.1 million in personnel and related costs and a a decrease of $0.3 million in facility related costs, partially offset by an increase of $0.4 million in outside services.

For the year ended December 31, 2021, the decrease in CPI-818 costs of $1.8 million as compared to the year ended December 31, 2020, primarily consisted of a decrease of $1.0 million in clinical trial expenses, a decrease of $0.1 million in other outside services and a decrease of $0.1 million in drug manufacturing costs.

Additionally, $0.6 million in drug manufacturing costs, which were expensed in prior years, were billed to Angel Pharmaceuticals during the year ended December 31, 2021.

For the year ended December 31, 2021, the decrease in costs related to other programs of $0.6 million as compared to the year ended December 31, 2020, primarily consisted of a decrease of $0.5 million in manufacturing costs and a decrease of $0.1 million in other outside services.

For the year ended December 31, 2021, the decrease in unallocated costs of $3.3 million as compared to the year ended December 31, 2020, primarily consisted of a decrease of $2.7 million in personnel and related costs and a decrease of $0.6 million in outside services.

For the year ended December 31, 2020, the decrease in ciforadenant costs of $2.0 million as compared to the year ended December 31, 2019, primarily consisted of a decrease of $1.5 million in clinical trial expenses, a decrease of $0.2 million in drug manufacturing costs and a decrease of $0.3 million in other outside services.

For the year ended December 31, 2020, the increase in mupadolimab costs of $2.2 million as compared to the year ended December 31, 2019, primarily consisted of an increase of $3.5 million in clinical trial expenses as well as an increase of $0.4 million in other outside services, partially offset by a decrease of $1.7 million in drug manufacturing costs.

For the year ended December 31, 2020, the decrease in CPI-818 costs of $3.8 million as compared to the year ended December 31, 2019, primarily consisted of a decrease of $2.7 million in drug manufacturing costs, a decrease of $0.4 million in clinical trial expenses and a decrease of $0.7 million in other outside services.

For the year ended December 31, 2020, the decrease in costs related to other programs of $0.3 million as compared to the year ended December 31, 2019, primarily consisted of a decrease of $0.6 million in outside services, partially offset by an increase of $0.3 million in drug manufacturing costs.

For the year ended December 31, 2020, the decrease in unallocated costs of $2.2 million as compared to the year ended December 31, 2019, primarily consisted of a decrease of $1.5 million in outside services and a decrease of $0.7 million in personnel and related costs.

General and Administrative Expenses

For the year ended December 31, 2021, the decrease in general and administrative expenses of $2.4 million as compared to the year ended December 31, 2020, primarily consisted of an increase of $1.3 million in outside professional services and an increase of $1.1 million in personnel and related costs.

For the year ended December 31, 2020, the increase in general and administrative expenses of $1.1 million as compared to the year ended December 31, 2019, primarily consisted of an increase of $1.9 million in outside professional services, which was partially offset by a decrease of $0.8 million in personnel and related costs.

For the year ended December 31, 2022, the decrease in general and administrative expenses of $1.4 million as compared to the year ended December 31, 2021, primarily consisted of a decrease in personnel and related costs.

For the year ended December 31, 2021, the decrease in general and administrative expenses of $2.4 million as compared to the year ended December 31, 2020, primarily consisted of a decrease of $1.3 million in outside professional services and a decrease of $1.1 million in personnel and related costs.

Interest Income and Other Expense, net

For the year ended December 31, 2022, the increase in interest income and other expense, net of $0.7 million as compared to the year ended December 31, 2021, primarily consisted of an increase in interest income earned due to an increase in interest rates.

For the year ended December 31, 2021, the decrease in interest income and other expense, net of $0.6 million as compared to the year ended December 31, 2020, primarily consisted of a decrease in interest income earned due to a decrease in interest rates.

For the year ended December 31, 2020, the decrease in interest income and other expense, net of $1.6 million as compared to the year ended December 31, 2019, primarily consisted of a decrease in interest income earned due to a decrease in cash equivalents and marketable securities and a decrease in interest rates.

Gain from sale of property and equipment

For the year ended December 31, 2022, the gain from sale of property and equipment consisted of proceeds from the sale of laboratory equipment.

Gain on deconsolidation of Angel Pharmaceuticals

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Sublease income – related party

For the year ended December 31, 2022, the increase in sublease income – related party of $0.6 million as compared to the year ended December 31, 2021, consisted of a full year of rent payments made by Angel Pharmaceuticals pursuant to the facility sublease entered into in August 2021.

For the year ended December 31, 2021, the sublease income – related party of $0.2 million represents rent payments made by Angel Pharmaceuticals pursuant to the facility sublease entered into in August 2021

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For the year ended December 31, 2022, the increase in loss from equity method investment of $5.2 million as compared to the year ended December 31, 2021, primarily consisted of an increase in our share of Angel Pharmaceutical’s loss for the year ended December 31, 2022.

For the year ended December 31, 2020, the loss from equity method investment of $0.2 million represents our share of Angel Pharmaceutical’s loss for the period from deconsolidation of our investment in Angel Pharmaceuticals through December 31, 2020.

For the year ended December 31, 2021, the increase in loss from equity method investment of $4.6 million as compared to the year ended December 31, 2020, primarily consisted of an increase in our share of Angel Pharmaceutical’s loss for the year ended December 31, 2021.

Liquidity and Capital Resources

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As of December 31, 2022, we had cash, cash equivalents and marketable securities of $42.3 million and an accumulated deficit of $307.7 million, compared to cash, 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 sales of our common stock and convertible preferred stock.

Since our inception and through December 31, 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.

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.

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 year ended December 31, 2021, we sold 6,609,605 shares under its at-the-market offering program resulting in net proceeds of $29.0 million.

As of December 31, 2021, $18.9 million remained for sale under the 2020 Sales Agreement and $40.0 million remained for sale under the 2021 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 consolidated financial statements as of and for year ended December 31, 2021.

During the year ended December 31, 2022, we did not sell any shares under our at-the-market offering program.

As of December 31, 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 December 31, 2022, $18.9 million and $40.0 million remained for sale under the 2020 Sales Agreement and 2021 Sales Agreement, respectively.

financial statements as of and for year ended December 31, 2022.

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

● the progress, timing, costs and results of clinical trials for mupadolimab, CPI-818 and ciforadenant;

● the extent to which the COVID-19 pandemic may impact our business, including our clinical trials and financial condition;

● the progress, timing, costs and results of clinical trials for CPI-818, ciforadenant and mupadolimab;

● the timing, progress, costs and results of preclinical and clinical development activities for our other product candidates;

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● our efforts to enhance operational systems and hire additional personnel, including personnel to support development of our product candidates and satisfy our obligations as a public company;

● the extent to which the COVID-19 pandemic may impact our business, including our clinical trials and financial condition;

● other factors described in the section of this report entitled “Risk Factors.”

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Cash Flows from Operating Activities

Cash used in operating activities during the year ended December 31, 2022 was $27.0 million, which primarily consisted of a net loss of $41.3 million, adjusted by non-cash charges of $12.9 million, primarily consisting of $2.7 million of stock compensation expense and $10.0 million in loss from equity method investment, a decrease of $0.6 million in prepaid and other current assets, an increase of $0.4 million in accounts payable, a increase of $0.5 million in accrued and other liabilities increase and an increase of $0.1 million in accounts receivable – related party.

Cash used in operating activities during the year ended December 31, 2021 was $36.7 million, which primarily consisted of a net loss of $43.2 million, adjusted by non cash charges of $9.8 million, primarily consisting of $4.2 million of stock compensation expense and $4.8 million in loss from equity method investment, and an increase of $0.2 million in other assets, partially offset by a decrease of $2.4 million in accounts payable and accrued and other liabilities, an increase of $0.5 million in accounts receivable – related party, an increase of $0.3 million in prepaid and other current assets and an increase of $0.2 million in operating lease right-of-use asset, net of operating lease liability.

Cash used in operating activities during the year ended December 31, 2020 was $34.8 million, which primarily consisted of a net loss of $6.0 million, adjusted by non-cash charges of $6.8 million, primarily consisting of $5.7 million of stock compensation expense, a non-cash gain on deconsolidation of Angel Pharmaceuticals of $37.5 million, an increase of $1.7 million in accounts payable and accrued and other liabilities and a decrease of $0.4 million in prepaid and other current and non-current assets, partially offset by a decrease of $0.2 million in operating lease liability, net of operating lease right-of-use asset amortization.

Cash used in operating activities during the year ended December 31, 2019 was $37.3 million, which primarily consisted of a net loss of $46.7 million, adjusted by non-cash charges of $7.4 million, primarily consisting of $7.3 million of stock compensation expense, an increase of $2.5 million in accounts payable and accrued and other liabilities and an increase of $0.4 million in prepaid and other current assets, primarily associated with the timing of payments to vendors.

Cash Flows from Investing Activities

Cash used investing activities during the year ended December 31, 2022 was $23.3 million, which consisted of purchases of marketable securities of $66.2 million and purchases of property and equipment of $0.3 million, which were partially offset by proceeds from maturities of marketable securities of $43.2 million.

Cash provided by investing activities during the year ended December 31, 2021 was $21.6 million, which consisted of proceeds from maturities of marketable securities of $30.9 million, which were partially offset by purchases of marketable securities of $9.4 million .

Cash provided by investing activities during the year ended December 31, 2020 was $44.8 million, which consisted of proceeds from maturities of marketable securities of $86.4 million and proceeds from sales of marketable securities of $1.0 million, partially offset by purchases of marketable securities of $42.5 million and purchases of property and equipment of $0.1 million.

Cash provided by investing activities during the year ended December 31, 2019 was $3.3 million, which consisted of proceeds from maturities of marketable securities of $141.9 million, which were partially offset by purchases of marketable securities of $138.6 million.

Cash Flows from Financing Activities

During the year ended December 31, 2022, there was no cash provided by or used in financing activities.

Cash provided by financing activities during the year ended December 31, 2021 was $62.2 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.

Cash provided by financing activities during the year ended December 31, 2020 was $1.3 million, which consisted of $1.2 million in net proceeds from the issuance of common stock through our at-the-market offering program and $0.1 million of proceeds from the exercise of stock options.

Cash provided by financing activities during the year ended December 31, 2019 was negligible.

Off-Balance Sheet Arrangements

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Contractual Obligations

Our principal commitments consist of obligations under our non-cancelable operating lease for our facilities that expires in 2025 and non-cancellable purchase commitments of $9.3 million for the purchase of drug substance in 2022.

Our principal commitment consists of obligations under our non-cancelable operating lease for our facilities that expires in 2025.

Critical Accounting Estimates

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We determined the appropriate classification of marketable securities at the time of purchase and evaluates such designation as of each balance sheet date.

To date, all marketable securities have been classified as available-for-sale and are carried at fair value with unrealized gains and losses, if any, included as a component of

accumulated other comprehensive income (loss) in stockholders’ equity (deficit).

To date, all marketable securities have been classified as available-for-sale and are carried at fair value with unrealized gains and losses, if any, included as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit).

Interest and realized gains and losses are included in interest income.

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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-K

Item 7. Management’s Discussion and Analysis