What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-04 compared with 2021-05-05 · 99 added, 57 removed, 264 unchanged (37% of the section changed)

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Ou r five clinic al-stage programs are:

• our leucine-rich repeat kinase 2 ("LRRK2") inhibitor program, in collaboration with Biogen, to address Parkinson’s disease;

• our leucine-rich repeat kinase 2 ("LRRK2") inhibitor program, to be developed in collaboration with Biogen, to address Parkinson’s disease;

• our eukaryotic initiation factor 2 B ("EIF2B") activator program to address diseases such as amyotrophic lateral sclerosis ("ALS") and frontotemporal dementia ("FTD");

• our ETV:IDS program, our lead brain-penetrant enzyme replacement therapy ("ERT"), enabled by our enzyme transport vehicle ("ETV"), which is designed to restore iduronate 2-sulfatase ("IDS"), and reduce glycosaminoglycans, both peripherally and in the brain, in patients with mucopolysaccharidosis II ("MPS II", or "Hunter syndrome");

• our ETV:IDS program, our lead brain-penetrant enzyme replacement therapy ("ERT"), enabled by our enzyme transport vehicle ("ETV"), which is designed to restore iduronate 2-sulfatase ("IDS"), and reduce glycosaminoglycans ("GAGs"), both peripherally and in the brain, in patients with mucopolysaccharidosis II ("MPS II", or "Hunter syndrome");

• our receptor interacting serine/threonine protein kinase 1 ("RIPK1") inhibitor program, partnered with Sanofi, to address neurological diseases such as Alzheimer's disease and ALS as well as multiple sclerosis ("MS");

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EIF2B DNL343 Ph 1 ALS and FTD Denali

RIPK1 (Peripheral) DNL758 (SAR443122) Ph 1b complete Systemic inflammatory diseases

RIPK1 (Peripheral) DNL758 (SAR443122) Ph 2 CLE

RIPK1 (CNS) DNL788 (SAR443820) Ph 1 Neurological diseases

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and (5) ETV:ARSA for metachromatic leukodystrophy ("MLD");

• In February 2021, we announced Sanofi's decision, upon completion of a Phase 1b study in hospitalized adult patients with severe COVID-19 lung disease, to cease further development of DNL758 (SAR443122) in COVID-19 based on the rapidly evolving landscape of treatment and prevention options for COVID-19.

Although the study did not meet its primary endpoint, DNL758 (SAR443122) was generally well tolerated and did generate positive signals of relevant biological effect.

Sanofi plans to commence dosing in a Phase 2 study of DNL758 (SAR443122) in CLE patients in the first half of 2021;

• In February 2021, we reported three-month data from Cohort A (n=5) in a Phase 1/2 study of DNL310 in patients with Hunter syndrome.

The data showed that DNL310 treatment resulted in normalization of glycosaminoglycan ("GAG") levels in cerebrospinal fluid and a safety and tolerability profile consistent with standard of care ERT.

The data showed that DNL310 treatment resulted in normalization of GAG levels in cerebrospinal fluid and a safety and tolerability profile consistent with standard of care ERT.

In March 2021, we announced that the U.S.

Food and Drug Administration ("FDA") granted Fast Track designation to DNL310 for the treatment of patients with Hunter syndrome;

Denali plans to report six-month data from Cohort A in mid-2021;

• In May 2021, we announced that based on interim data from the ongoing Phase 1 single- and multiple-ascending-dose study of DNL343 in healthy volunteers, safety and pathway engagement biomarker goals of the study were met.

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Based on these data, we plan to initiate a Phase 1b study in patients with ALS in the second half of 2021;

• To address risks posed by the COVID-19 pandemic, we have implemented policies that enable some of our employees to work remotely.

For all on-site personnel, we have implemented several safety protocols, including regular, mandatory COVID-19 testing procedures, compliance measures for social distancing, and use of personal protective equipment.

After initial COVID-19 pandemic shutdown restrictions were put into place in March 2020, we experienced a pause in patient recruitment in several clinical trials.

Recruitment has since resumed for all affected clinical trials.

• In May 2021, we presented results from two studies of its small molecule LRRK2 inhibitor, DNL151 (BIIB122), in a Phase 1 study in healthy volunteers and a Phase 1b study in patients with Parkinson's disease, at the International Association of Parkinsonism and Related Disorders Virtual Congress.

DNL151 (BIIB122) was generally well tolerated, and target engagement and pathway engagement biomarker goals were met.

We plan to initiate late-stage clinical development of DNL151 (BIIB122) in Parkinson's disease by year-end 2021 with Biogen;

• In June 2021, we announced that our partner Sanofi commenced dosing in a Phase 2 study of DNL758 (SAR443122), a peripherally-restricted small molecule inhibitor of RIPK1, in patients with CLE, triggering a $15.0 million milestone which was received in July 2021;

• In July 2021, we reported positive interim data from the Phase 1/2 study of ETV:IDS (DNL310) in patients with Hunter syndrome (MPS II).

The data demonstrated durability of effect with CNS impact, improved peripheral activity after switching from standard of care, and a safety profile consistent with standard of care enzyme replacement therapy.

Furthermore, initial indications of improved clinical symptoms and function, assessed as exploratory endpoints, were reported by investigators and parents in all five patients enrolled in Cohort A.

We also shared data from Cohort B, which is designed to inform dose selection;

exploratory biomarker data demonstrated activity of DNL310 across all dose regimens.

Based on these data, we plan to begin enrolling Cohort C in the Phase 1/2 study to further investigate clinical endpoints and initiate a pivotal Phase 2/3 study of DNL310 in the first half of 2022.

We do not have any products approved for sale and have not generated any product revenue since our inception.

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Our ability to generate product revenue will depend on the successful development and eventual commercialization of one or more of our product candida tes.

Our net losses wer e $70.0 million and $56.8 million for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021, we had an accumulated deficit o f $424.5 million.

Our net losses wer e $60.7 million and $130.7 million for the three and six months ended June 30, 2021 , respectively, and $58.8 million and $115.5 million for the three and six months ended June 30, 2020, respectively.

As of June 30, 2021, we had an accumulated deficit o f $485.1 million.

We e xpect to continue to incur significant expenses and operating losses as we advance our current clinical stage programs through healthy volunteer and patient trials;

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Results of Operations

Comparison of the three months ended March 31, 2021 and 2020

Comparison of the three and six months ended June 30, 2021 and 2020

The following table sets forth the significant components of our results of operations (in thousands):

Three Months Ended March 31, Change

Three Months Ended June 30, Change

2021 2020 $ %

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Loss before income taxes (60,691) (58,679) (2,012) 3

Income tax provision — (79) 79 (100)

Net loss $ (60,691) $ (58,758) $ (1,933) 3 %

__________________________________________________

* Percentage is not meaningful.

Six Months Ended June 30, Change

2021 2020 $ %

Collaboration revenue:

Collaboration revenue from customers

$ 30,858 $ 9,363 $ 21,495 * %

Other collaboration revenue

4 88 (84) (95)

Total collaboration revenue

30,862 9,451 21,411 *

Operating expenses:

Research and development

125,918 104,168 21,750 21

General and administrative

37,981 26,527 11,454 43

Total operating expenses

163,899 130,695 33,204 25

Loss from operations (133,037) (121,244) (11,793) 10

Interest and other income, net

2,305 5,667 (3,362) (59)

Loss before income taxes (130,732) (115,577) (15,155) 13

Income tax benefit — 56 (56) (100)

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Collaboration revenue.

Collaboration revenue was $7.9 million and $3.6 million for the three months ended March 31, 2021 and 2020, respectively.

The increase in collaboration revenue of $4.3 million for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was due to an increase in revenue from our collaboration with Takeda of $4.0 million driven by increased costs incurred in the underlying partnered programs, and revenue of $0.9 million from our collaboration with Biogen, partially offset by a decrease of $0.6 million in revenue from our collaboration with Sanofi driven by the termination of revenue for retained activities which have been transferred to Sanofi.

Collaboration revenue was $22.9 million and $30.9 million for the three and six months ended June 30, 2021, respectively, and $5.8 million and $9.5 million for the three and six months ended June 30, 2020, respectively.

The increase in collaboration revenue of $17.1 million and $21.4 million for the three and six months ended June 30, 2021, respectively, compared to the comparative period in the prior year were primarily due to the achievement of a $15.0 million milestone in June 2021 under our collaboration with Sanofi related to the initiation of the Phase 2 study of DNL758 (SAR443122), as well as an increase in revenue from our collaboration with Takeda of $1.6 million driven by increased costs incurred in the underlying partnered programs, and revenue of $0.8 million from our collaboration with Biogen.

Research and development expen ses.

Research and development expenses were $60.2 million and $51.0 million for the three months ended March 31, 2021 and 2020, respectively.

Research and development expenses were $65.7 million and $125.9 million for the three and six months ended June 30, 2021, compared to $53.2 million and $104.2 million for the three and six months ended June 30, 2020, respectively.

The following table summarizes our research and development expenses by program and category (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

LRRK2 program external expenses

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TV platform and other program external expenses

7,659 3,462 15,142 6,186

Other external research and development expenses

7,755 7,782 13,234 15,174

Personnel-related expenses (1)

1 unchanged sentence

Other unallocated research and development expenses

9,117 8,277 17,504 16,264

Cost sharing reimbursements from related party (2)

(1,567) — (4,078) —

Total research and development expenses

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__________________________________________________

(1) Personnel-related expenses include stock-based compensation expense of $12.3 million and $6.1 million for the three months ended March 31, 2021 and 2020, respectively, reflecting an increase of $6.2 million.

(2) Cost sharing reimbursements from Biogen during the three months ended March 31, 2021 for LRRK2 program external expenses, and LRRK2 program internal expenses which are included within Personnel-related expenses.

The increase in research and development expenses of approximately $9.2 million for three months ended March 31, 2021 and 2020, respectively, was primarily attributable to the following:

• An increase of $8.9 million in personnel-related expenses, consisting of a $2.7 million increase in salaries and related expenses attributable to an increase in our research and development headcount, and a $6.2 million increase in stock-based compensation expense primarily attributable to additional equity award grants and our increasing market price;

• $4.8 million of increased TV platform and other program external expenses, reflecting our increased investment in our pipeline, including the progress in our PTV:PGRN and ATV:TREM2 programs as well our continued investment in developing a robust pipeline;

(1) Personnel-related expenses include stock-based compensation expense of $12.5 million and $24.8 million for the three and six months ended June 30, 2021, respectively, and $7.1 million and $13.2 million for the three and six months ended June 30, 2020, respectively, reflecting an increase of $5.4 million and $11.6 million, respectively.

(2) Cost sharing reimbursements from Biogen during the three and six months ended June 30, 2021 are for LRRK2 program external expenses and LRRK2 program internal expenses which are included within Personnel-related expenses.

The increase in research and development expenses of approximately $12.5 million for the three months ended June 30, 2021 and June 30, 2020, was primarily attributable to the following:

• An increase of $8.1 million in personnel-related expenses, consisting of a $5.4 million increase in stock-based compensation expense primarily attributable to additional equity award grants and our increasing market price, and a $2.7 million increase in salaries and related expenses attributable to an increase in our research and development headcount;

• An increase of $4.2 million in TV platform and other program external expenses, reflecting our increased investment in our pipeline, including the progress in our PTV:PGRN and ATV:TREM2 programs as well our continued investment in developing a robust pipeline;

• Increases of $2.8 million and $1.6 million in EIF2B and ETV:IDS program external expenses, respectively, reflecting the progress of these programs in clinical trials during 2021;

• $0.4 million of increased other unallocated research and development expenses, which is primarily due to an increase in facilities-related expenses of $0.6 million including depreciation expense and certain costs associated with COVID-19 safety protocols and an increase in lab consumable expenses of $0.1 million, partially offset by a $0.3 million decrease in other general costs, primarily due to a decrease in travel related expenses attributable to our research and development departments due to the COVID-19 pandemic.

These increases were partially offset by a decrease of $7.2 million in the LRRK2 program external expenses primarily due to completion of the phase 1 and 1b trials of DNL151 (BIIB122), cost sharing reimbursements from Biogen of $2.5 million, and a $1.9 million decrease in other external research and development expenses.

• An increase of $0.8 million in other unallocated research and development expenses, primarily due to an increase of $0.4 million in lab consumable expenses, an increase in facilities-related expenses of $0.3 million including depreciation expense and certain costs associated with COVID-19 safety protocols, and a $0.1 million increase in other general costs.

The increase in research and development expenses of approximately $21.7 million for the six months ended June 30, 2021 and June 30, 2020, was primarily attributable to the following:

• An increase of $17.0 million in personnel-related expenses, consisting of an $11.6 million increase in stock-based compensation expense primarily attributable to additional equity award grants and our increasing market price, and a $5.4 million increase in salaries and related expenses attributable to an increase in our research and development headcount;

• An increase of $9.0 million in TV platform and other program external expenses, reflecting our increased investment in our pipeline, including the progress in our PTV:PGRN and ATV:TREM2 programs as well our continued investment in developing a robust pipeline;

• Increases of $5.8 million and $5.3 million in EIF2B and ETV:IDS program external expenses, respectively, reflecting the progress of these programs in clinical trials during 2021;

• An increase of $1.2 million in other unallocated research and development expenses, which is primarily due to an increase in facilities-related expenses of $1.0 million including depreciation expense and certain costs associated with COVID-19 safety protocols and an increase in lab consumable expenses of $0.5 million, partially offset by a $0.3 million decrease in other general costs, primarily due to a decrease in travel related expenses attributable to our research and development departments due to the COVID-19 pandemic.

These increases were partially offset by a decrease in external expenses related to the LRRK2 program primarily due to completion of the phase 1 and 1b trials of DNL151 (BIIB122) of $10.6 million, cost sharing reimbursements under our collaboration with Biogen of $4.1 million, and a $1.9 million decrease in other external research and development expenses primarily due to a decrease in DNL747 costs after completion of the Phase 1b trials.

General and administrative expenses.

General and administrative expenses were $18.9 million and $12.6 million three months ended March 31, 2021 and 2020, respectively.

General and administrative expenses were $19.0 million for the three months ended June 30, 2021 compared to $14.0 million for the three months ended June 30, 2020, respectively.

The increase of $5.0 million was primarily attributable to the following:

• $4.2 million of increased personnel-related expenses, driven by higher general and administrative headcount and stock-based compensation expense associated with additional equity award grants and our increasing market price;

• $0.7 million of increased legal and other professional services expenses, primarily due to accounting and tax fees associated with assessment of the Biogen Collaboration Agreement;

• $0.9 million of increased other general costs, including insurance, tax and IT related expenses;

• $0.1 million of increased facilities related expenses, including depreciation expense and certain costs associated with COVID-19 safety protocols.

These increases were partially offset by a decrease $0.2 million in legal and other professional services expenses.

General and administrative expenses were $38.0 million for the six months ended June 30, 2021 compared to $26.5 million for the six months ended June 30, 2020, respectively.

The increase of $11.5 million was primarily attributable to the following:

• $9.0 million of increased personnel-related expenses, driven by higher general and administrative headcount and stock-based compensation expense associated with additional equity award grants and our increasing market price;

• $1.7 million of increased other general costs, including insurance, tax and IT related expenses;

• $0.5 million of increased professional services expenses, primarily due to accounting, tax and consulting fees associated with assessment of the Biogen Collaboration Agreement;

• $0.3 million of increased facilities related expenses, including depreciation expense and certain costs associated with COVID-19 safety protocols.

Interest and other income, net.

Interest and other income, net was $1.2 million and $3.1 million for the three months ended March 31, 2021 and 2020, respectively.

Interest and other income, net was $1.1 million and $2.6 million for the three months ended June 30, 2021 and 2020, respectively.

The decrease of $1.5 million was primarily due to decreased interest income earned on our investments due to declining interest rates.

Income tax benefit.

Income tax benefit was $0.1 million for the three months ended March 31, 2020 due to the tax benefit associated with an unrealized gain on marketable securities in other comprehensive income.

There was no income tax benefit for the three months ended March 31, 2021.

Comparison of the three months ended March 31, 2020 and 2019

Refer to “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” in our Form 10-Q for the three months ended March 31, 2020 for a discussion of the results of operations for the three months ended March 31, 2020 compared to the three months ended March 31, 2019.

Interest and other income, net.

Interest and other income, net was $2.3 million and $5.7 million for the six months ended June 30, 2021 and 2020, respectively.

The decrease of $3.4 million was primarily due to decreased interest income earned on our investments due to declining interest rates.

Income tax provision (benefit).

There was an income tax provision of $0.1 million for the three months ended June 30, 2020 associated with a decrease in unrealized gains on marketable securities in other comprehensive income and an income tax benefit of $0.1 million for the six months ended June 30, 2020 due to the tax benefit associated with an unrealized gain on marketable securities in other comprehensive income.

There was no income tax benefit for the three and six months ended June 30, 2021.

Liquidity and Capital Resources

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In January 2020, we sold 9.0 million shares of common stock (inclusive of shares sold pursuant to an overallotment option granted to the underwriters in connection with the offering) through an underwritten public offering at a price of $23.00 per share for aggregate net proceeds of approximately $193.9 million.

Pursuant to the Takeda Collaboration Agreement, we have received $71.0 million related to upfront and milestone payments through March 31, 2021 .

Pursuant to the Takeda Collaboration Agreement, we have received $71.0 million related to upfront and milestone payments through June 30, 2021 .

Further, under the associated Stock Purchase Agreement we received $110.0 million in February 2018 for the sale and issuance of 4,214,559 shares of our common stock.

Pursuant to the Sanofi Collaboration Agreement, we received an upfront payment of $125.0 million in November 2018 and a milestone payment of $10.0 million in August 2019, which was triggered by the commencement of a DNL758 (SAR443122) Phase 1 clinical trial in healthy volunteers.

W e have received further payments of $13.7 million for performance of Retained Activities through March 31, 2021.

W e also received further payments of $13.5 million for performance of Retained Activities.

In June 2021, Sanofi commenced dosing of a patient in a Phase 2 study of DNL758 (SAR443122) in CLE patients, triggering a $15.0 million milestone payable to us, which we received in July 2021.

Pursuant to the common stock purchase agreement between us and BIMA (the "Biogen Stock Purchase Agreement"), we received $465.0 million in September 2020 for the sale and issuance of 13,310,243 shares of our common stock.

In October 2020, we received $560.0 million from Biogen in upfront payments associated with the Biogen Collaboration Agreement.

We have received cost sharing reimbursements of $9.3 million from Biogen through March 31, 2021.

As of March 31, 2021, we had cash, cash equivalents and marketable securities in the amount of $1.45 billion.

We have received cost sharing reimbursements of $11.8 million from Biogen through June 30, 2021.

As of June 30, 2021, we had cash, cash equivalents and marketable securities in the amount of $1.4 billion.

Future Funding Requirements

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Since our inception, we have incurred significant losses and negative cash flows from operations.

We have an accumulated deficit of $424.5 million through March 31, 2021.

We have an accumulated deficit of $485.1 million through June 30, 2021.

We expect to incur substantial additional losses in the future as we conduct and expand our research and development activities.

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The following table sets forth a summary of the primary sources and uses of cash for each of the periods presented below (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash used in operating activities $ (104,461) $ (97,849)

Net cash used in investing activities (25,405) (13,333)

Net cash provided by (used in) investing activities 72,132 (43,744)

Net cash provided by financing activities 10,865 199,328

1 unchanged sentence

Net Cash Used In Operating Activities

During the three months ended March 31, 2021, cash used in operating activities was $50.2 million, which consisted of a net loss of $70.0 million, adjusted by non-cash items primarily related to stock-based compensation and depreciation, net amortization of discounts on marketable securities and non-cash rent expenses.

Cash used in operating activities was also driven by changes in our operating assets and liabilities, including a decrease to Accruals and other current liabilities attributable to the payout of the bonus accrual in the three months ended March 31, 2021.

Net Cash Used In Investing Activities

During the three months ended March 31, 2021, cash used in investing activities was $25.4 million, which consisted of $463.1 million of purchases of marketable securities and $2.8 million of capital expenditures to purchase property and equipment, partially offset by $440.5 million in proceeds from the maturity of marketable securities.

During the six months ended June 30, 2021, cash used in operating activities was $104.5 million, which consisted of a net loss of $130.7 million, adjusted by non-cash items primarily related to stock-based compensation and depreciation, net amortization of discounts on marketable securities and non-cash rent expenses.

Cash used in operating activities was also driven by changes in our operating assets and liabilities.

Net Cash Provided By (Used In) Investing Activities

During the six months ended June 30, 2021, cash provided by investing activities was $72.1 million, which consisted of $923.0 million in proceeds from the maturity of marketable securities, partially offset by $847.3 million of purchases of marketable securities and $3.6 million of capital expenditures to purchase property and equipment.

Net Cash Provided By Financing Activities

During the three months ended March 31, 2021, cash provided by financing activities was $3.8 million in proceeds from the exercise of options to purchase common stock.

Discussion of the three months ended March 31, 2020

Refer to “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our Form 10-Q for the three months ended March 31, 2020 for a discussion of the cash flows for that period.

During the six months ended June 30, 2021, cash provided by financing activities was $10.9 million in proceeds from the exercise of options to purchase common stock as well as the purchase of ESPP shares.

Off-Balance Sheet Arrangements

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In addition, the Headquarters Lease Amendment provided a tenant improvement allowance ("TIA") of up to $25.9 million, which was fully utilized, of which $4.4 million will be repaid to the landlord in the form of additional monthly rent.

This is recorded as leasehold improvement assets and an offset to the lease ROU asset on the Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020.

This is recorded as leasehold improvement assets and an offset to the lease ROU asset on the Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020.

We are also required to pay the operating expenses for the New Premises, such as taxes and insurance, which are treated as variable lease payments.

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Unless earlier terminated, the DMSA will expire on September 6, 2022.

As of March 31, 2021 and December 31, 2020, we had open purchase orders for biological product development and manufacturing costs totaling $33.4 million and $33.0 million, respectively.

As of June 30, 2021 and December 31, 2020, we had open purchase orders for biological product development and manufacturing costs totaling $32.5 million and $33.0 million, respectively.

The activities under these purchase orders are expected to be completed by February 2028.

As of March 31, 2021 and December 31, 2020, we had total non-refundable purchase commitments of $28.5 million and $27.1 million, respectively, under the DMSA.

During the three months ended March 31, 2021 and 2020, we incurred costs of $5.2 million and $1.0 million, and made payments of $0.7 million and $3.2 million, respectively, for the development and manufacturing services rendered under the DMSA.

As of June 30, 2021 and December 31, 2020, we had total non-refundable purchase commitments of $28.4 million and $27.1 million, respectively, under the DMSA.

During the three months ended June 30, 2021 and 2020, we incurred costs of $3.2 million and $3.8 million, and made payments of $5.7 million and $2.0 million, respectively, for the development and manufacturing services rendered under the DMSA.

During the six months ended June 30, 2021 and 2020, we incurred costs of $8.4 million and $4.8 million, respectively, and made payments of $6.4 million and $5.2 million, respectively, for the development and manufacturing services rendered under the DMSA.

Other than those detailed above, there have been no other material changes from the contractual obligations and commitments previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 26, 2021.

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Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2021 from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 26, 2021 .

There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2021 from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 26, 2021 .

Recent Accounting Pronouncements

Except as described in Note 1 to the Condensed Consolidated Financial Statements under the heading "Recently Adopted Accounting Pronouncement," there have been no new accounting pronouncements or changes to accounting pronouncements during the three months ended March 31, 2021 , as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 26, 2021, that are of significance or potential significance to us.

Except as described in Note 1 to the Condensed Consolidated Financial Statements under the heading "Recently Adopted Accounting Pronouncement," there have been no new accounting pronouncements or changes to accounting pronouncements during the six months ended June 30, 2021 , as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 26, 2021, that are of significance or potential significance to us.

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