What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-06 compared with 2024-08-01 · 65 added, 70 removed, 290 unchanged (32% of the section changed)

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• BIIB122/DNL151, our leucine-rich repeat kinase 2 ("LRRK2") inhibitor program, being developed in collaboration with Biogen, to address Parkinson’s disease ("PD");

• SAR443820/DNL788, our CNS-penetrant receptor interacting serine/threonine protein kinase 1 ("RIPK1") inhibitor program, being developed in collaboration with Sanofi, to address neurological diseases such as multiple sclerosis ("MS") and Alzheimer's disease;

• Eclitasertib (SAR443122/DNL758), a peripheral and non-CNS penetrant RIPK1 inhibitor, being developed in collaboration with Sanofi, to address peripheral inflammatory diseases such as ulcerative colitis ("UC").

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Ph 2/3 ALS Joint with Healey Center

LRRK2 BIIB122/DNL151 Ph 2a (planned)

LRRK2 BIIB122/DNL151 Ph 2a

Parkinson's disease Denali

Joint with Biogen

RIPK1 (CNS-penetrant) SAR443820/DNL788 Ph 2

RIPK1 (Peripheral) eclitasertib, or SAR443122/DNL758

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Following the Reagan-Udall Foundation workshop, we received written communication from the Center for Drug Evaluation and Research ("CDER") division of the FDA indicating openness to discussing an accelerated approval pathway for tividenofusp alfa in MPS II with cerebrospinal fluid heparan sulfate (CSF HS) as a surrogate biomarker.

We look forward to continued engagement with CDER regarding our intention to file for approval of tividenofusp alfa using the accelerated approval pathway.

We will provide an update in 2H 2024;

In September 2024, we announced that we plan to file a biologics license application (BLA) for accelerated approval for tividenofusp alpha (DNL310) for the treatment of MPS II (Hunter syndrome), based on the outcome of a recent successful meeting with the Center for Drug Evaluation and Research (CDER) division of the FDA.

In addition, the meeting also provides a path for conversion to full approval based on the totality of the tividenofusp clinical development plan.

Based on discussions with CDER, we will include preclinical and clinical data on biomarkers (CSF HS and neurofilament light (NfL)) and safety in the BLA for tividenofusp alfa as a treatment of MPS II and intend to submit the BLA under the accelerated approval pathway in early 2025;

• In January 2024, we announced that Part B in the TAK-594/DNL593 Phase 1/2 study in participants with FTD-GRN had been voluntarily paused to implement protocol modifications.

In the second quarter of 2024, we finalized the protocol amendment for the Phase 1/2 study and prescreening of participants for Cohort B2 is ongoing ;

In the second quarter of 2024, we finalized the protocol amendment for the Phase 1/2 study and screening of participants for Cohort B2 is ongoing ;

• In January 2024, we announced our intention to divest our preclinical small molecule portfolio, which was completed effective March 1, 2024.

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• In February 2024, we announced that dosing had been initiated in the Phase 1/2 study of DNL126 in MPS IIIA.

Phase 1/2 biomarker and safety data are expected by the end of 2024.

Further, in February 2024, we presented supportive preclinical data at WORLD Symposium TM demonstrating that DNL126 improves lysosomal and microglial morphology, degeneration, and cognitive behavior in MPS IIIA mice.

In June 2024, DNL126 was selected for the FDA's Support for clinical Trials Advancing Rare disease Therapeutics (START) program to accelerate the development of rare disease therapeutics.

In November, we announced that preliminary data from up to 25 weeks of dosing in the ongoing open-label Phase 1/2 study in MPS IIIA participants demonstrate a significant reduction in CSF HS levels from baseline, including normalization.

The safety profile supports continued development.

The most frequent treatment emergent adverse events were infusion related reactions of mild and moderate severity in all participants.

There was one serious adverse event considered by the investigator not related to drug.

Based on the preliminary Phase 1/2 results and a positive regulatory environment, we recently expanded the study and continue to assess the development plans including an accelerated approval path;

• In February 2024, we announced that the Phase 2 HIMALAYA study evaluating SAR443820/DNL788 in participants with ALS did not meet the primary endpoint of change in ALS Functional Rating Scale-Revised (ALSFRS-R).

Sanofi is evaluating SAR443820/DNL788 in another Phase 2 clinical trial in participants with MS which is fully enrolled, and the outcome of HIMALAYA study has no impact on the ongoing MS study;

In October 2024, we were informed by Sanofi that the K2 Phase 2 study evaluating the safety and efficacy of SAR443820/DNL788 on serum neurofilament light chain levels in participants with multiple sclerosis was discontinued based on not meeting the primary and key secondary endpoints;

• In February 2024, we announced that we entered into a securities purchase agreement with certain existing accredited investors for the private placement of 3,244,689 shares of our common stock at a price of $17.07 per share and pre-funded warrants to purchase an aggregate of 26,046,065 shares of our common stock at a purchase price of $17.06 per pre-funded warrant, resulting in net proceeds of approximately $499.3 million.

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The private placement closed on February 29, 2024, subject to customary closing conditions;

• In February 2024, we announced that we executed a Collaboration and Development Funding Agreement in January 2024 with a third party related to a global Phase 2a study of BIIB122/DNL151, which we plan to solely operationalize to evaluate safety and biomarkers associated with BIIB122 in participants with Parkinson’s disease and confirmed pathogenic variants of LRRK2.

• In February 2024, we announced that we executed a Collaboration and Development Funding Agreement in January 2024 with a third party related to a global Phase 2a study of BIIB122/DNL151, which we plan to solely operationalize to evaluate safety and biomarkers associated with BIIB122/DNL151 in participants with Parkinson’s disease and confirmed pathogenic variants of LRRK2.

This agreement includes committed funding of $75.0 million, of which $12.5 million was received in January 2024 and $12.5 million was received in July 2024, with the remainder to be triggered based on operational milestones in the study.

The third party will be eligible to receive low single-digit royalties from Denali on annual worldwide net sales of LRRK2 inhibitors for the treatment of Parkinson’s disease, with royalty amounts varying based on the scope of the label.

We plan to initiate the Phase 2a study in 2024.

Denali has initiated screening of participants for the global Phase 2a study to evaluate safety and biomarkers associated with BIIB122/DNL151 in participants with Parkinson’s disease and confirmed pathogenic variants of LRRK2.

Biogen will continue to conduct the ongoing global Phase 2b LUMA study in early-stage Parkinson’s disease.

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Healey & AMG Center for ALS at Massachusetts General Hospital (MGH) in collaboration with the Northeast ALS Consortium (NEALS) announced that enrollment is complete in Regimen G (DNL343) of the Phase 2/3 HEALEY ALS Platform Trial;

• In June 2024, we announced that the CDER has selected DNL126 (ETV:SGSH) for participation in the FDA's Support for clinical Trials Advancing Rare disease Therapeutics (START) Pilot Program to further accelerate the development of novel drug and biological products for rare diseases.

Participation in START is expected to facilitate and accelerate development of DNL126;

• In July 2024, Biogen terminated its license to the ATV:Abeta program enabled by our TfR-targeting technology against amyloid beta for the potential treatment of Alzheimer's disease and granted us rights to data generated during the collaboration.

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We have incurred significant operating losses to date and expect to continue to incur operating losses for the foreseeable future.

We had net losses of $99.0 million and $200.8 million for the three and six months ended June 30, 2024, respectively .

Due to revenue recognized from our collaboration arrangement with Biogen, we had net income of $183.4 million and $73.6 million for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, we had an accumulated deficit o f $1.32 billion.

We had net losses of $107.2 million and $308.0 million for the three and nine months ended September 30, 2024, respectively, and net losses of $99.4 million and $25.8 million for the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024, we had an accumulated deficit o f $1.42 billion.

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

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Interest and Other Income, Net

Interest and other income, net , consists pr imarily of interest income and investment income earned on our cash, cash equivalents, and marketable securities, as well as sublease income.

Interest and other income, net , consists pr imarily of interest income and investment income earned on our cash, cash equivalents, and marketable securities, as well as sublease income and interest on our finance lease liability.

Results of Operations

Comparison of the three and six months ended June 30, 2024 and 2023

Comparison of the three and nine months ended September 30, 2024 and 2023

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

Three Months Ended June 30, Change

Three Months Ended September 30, Change

2024 2023 $ %

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123,187 115,062 8,125 7

Income (loss) from operations (116,593) 170,483 (287,076) *

Loss from operations (123,187) (113,795) (9,392) 8

Interest and other income, net

15,995 14,442 1,553 11

Net income (loss) $ (99,026) $ 183,383 $ (282,409) * %

Net loss $ (107,192) $ (99,353) $ (7,839) 8 %

__________________________________________________

* Percentage is not meaningful.

Six Months Ended June 30,

Nine Months Ended September 30, Change

2024 2023 $ %

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Gain from divestiture of small molecule programs 14,537 — 14,537 *

Income (loss) from operations (234,308) 49,668 (283,976) *

Loss from operations (357,495) (64,127) (293,368) *

Interest and other income, net

49,475 38,376 11,099 29

Net income (loss) $ (200,828) $ 73,602 $ (274,430) * %

Net loss $ (308,020) $ (25,751) $ (282,269) * %

__________________________________________________

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Collaboration revenue.

There was no collaboration revenue for three and six months ended June 30, 2024, respectively, and $294.1 million and $329.3 million for three and six months ended June 30, 2023, respectively.

The decrease for the three months ended June 30, 2024 compared to June 30, 2023 was primarily due to $293.9 million in revenue recognized in April 2023 under the Biogen Collaboration Agreement as a result of Biogen exercising its option to license our ATV:Abeta program.

The decrease for the six months ended June 30, 2024 compared to June 30, 2023 was primarily due to the decrease in Biogen revenue described above, as well as decreases of revenue earned under the Takeda and Sanofi Collaboration Agreements of $10.0 million and $25.0 million, respectively.

There was no collaboration revenue for three and nine months ended September 30, 2024, and $1.3 million and $330.5 million for three and nine months ended September 30, 2023, respectively.

The decrease for the three months ended September 30, 2024 compared to September 30, 2023 was primarily due to activities under the Biogen Collaboration Agreement.

The decrease for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to a decrease of $293.9 million in revenue recognized in April 2023 under the Biogen Collaboration Agreement as a result of Biogen exercising its option to license our ATV:Abeta program, as well as decreases of revenue earned under the Takeda of $10.0 million and Sanofi Collaboration Agreements of $25.0 million received due to clinical milestones.

Research and development expen ses.

Research and development expenses were $91.4 million and $198.4 million for the three and six months ended June 30, 2024, compared to $97.5 million and $226.3 million for the three and six months ended June 30, 2023, respectively.

Research and development expenses were $98.2 million and $296.7 million for the three and nine months ended September 30, 2024, compared to $89.7 million and $316.1 million for the three and nine months ended September 30, 2023, respectively.

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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11,291 10,931 31,823 38,693

Net cost sharing and research funding payments (2)

Net cost sharing and research and development funding payments (2)

1,028 583 4,923 5,105

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(1) Personnel related expenses include stock-based compensation expense of $14.4 million and $30.7 million for the three and six months ended June 30, 2024, respectively, and $15.2 million and $32.0 million for the three and six months ended June 30, 2023, respectively, reflecting decreases of $0.8 million and $1.3 million, respectively.

(2) The breakdown of net cost sharing and research funding payments is shown in the table below.

The underlying costs for reimbursements and research funding are included with the specified external expenses line and personnel related expenses in the table above.

(1) Personnel related expenses include stock-based compensation expense of $14.1 million and $44.8 million for the three and nine months ended September 30, 2024, respectively, and $15.8 million and $47.8 million for the three and nine months ended September 30, 2023, respectively, reflecting decreases of $1.7 million and $3.0 million, respectively.

(2) The breakdown of net cost sharing, and research and development funding payments is shown in the table below.

The underlying costs for reimbursements and research and development funding are included with the specified external expenses line and personnel related expenses in the table above.

ATV:TREM2 program external expenses are presented within the TV platform and other program external expenses line.

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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4,965 3,378 14,194 14,504

LRRK2 research funding

LRRK2 research and development funding

(2,518) — (4,786) —

Net cost sharing payments and research funding payments

Net cost sharing payments and research and development funding payments

$ 1,028 $ 583 $ 4,923 $ 5,105

The decrease in research and development expenses of approximately $6.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, was primarily attributable to the following:

• a decrease of $4.9 million in personnel related expenses due to decreases in salary and stock based compensation expenses due to decreased headcount, primarily as a result of the divestiture of our preclinical small molecule programs in March 2024;

• a decrease in net cost sharing and research funding payments, primarily due to the recognition of $2.3 million of research funding for the LRRK2 program from the Collaboration and Development Funding Agreement executed in January 2024;

• decreases of $0.1 million and $1.4 million in TV platform and other program external expenses including ATV:TREM2 expenses, and PTV:PGRN program external expenses, respectively, due to the discontinuation of clinical development of TAK-920/DNL919 (ATV:TREM2) in Alzheimer’s disease and voluntary pause of Part B in the TAK-594/DNL593 (PTV:PGRN) Phase 1/2 study, respectively;

• a decrease of $1.9 million in other external research and development expenses associated with the divestiture of our preclinical small molecule programs.

These decreases were partially offset by increases in costs in various clinical stage programs, including of eIF2B ($3.7 million), ETV:SGSH ($0.7 million) and ETV:IDS ($0.4 million) reflecting the continued progress of these programs in clinical trials.

Further, there was an increase of $0.6 million in LRRK2 program external expenses due to activities related to our planned Phase 2a study in Parkinson's Disease patients.

The decrease in research and development expenses of approximately $27.9 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, was primarily attributable to the following:

• a decrease of $16.5 million in ETV:IDS program external expenses because the first quarter of 2023 included expense for a contingent consideration payment of $30.0 million related to the acquisition of F-star Gamma, which was triggered in March 2023 upon the achievement of a specified clinical milestone in the ETV:IDS program.

This decrease was partially offset by increased spend from the continued progress of this program in clinical trials in 2024, including costs related to our ongoing Phase 1/2 study and our potentially registrational Phase 2/3 study;

• decreases of $2.0 million and $2.6 million in TV platform and other program external expenses including ATV:TREM2 expenses, and PTV:PGRN program external expenses, respectively, due to the discontinuation of clinical development of TAK-920/DNL919 (ATV:TREM2) in Alzheimer’s disease and voluntary pause of Part B in the TAK-594/DNL593 (PTV:PGRN) Phase 1/2 study, respectively;

• a decrease of $3.7 million in personnel related expenses due to decreases in salary and stock based compensation expenses due to decreased headcount, primarily as a result of the divestiture of our preclinical small molecule programs in March 2024;

• a decrease of $3.7 million in other external research and development expenses primarily due to elevated facility costs in the six months ended June 30, 2023 as a result of accelerated depreciation on leasehold improvements associated with the termination of the former SLC Lease;

• the recognition of $2.3 million of research funding or the LRRK2 program from the Collaboration and Development Funding Agreement executed in January 2024.

These decreases were partially offset by increases of $6.6 million and $2.5 million in eIF2B and ETV:SGSH program external expenses, respectively, reflecting the continued progress of these programs in clinical trials.

The increase in research and development expenses of approximately $8.5 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, was primarily attributable to the following:

• Increases in costs in various clinical stage programs, including of eIF2B ($2.7 million), ETV:IDS ($2.5 million), ETV:SGSH ($1.6 million), LRRK2 ($1.0 million) and PTV:PGRN ($0.6 million) reflecting the continued progress of these programs in clinical trials;

• An increase of $6.4 million in TV platform and other program external expenses, reflecting our continued investment in our TV-enabled product candidates.

These increases were partially offset by a decrease $4.3 million in personnel related expenses due to decreases in salary and stock-based compensation expenses due to decreased headcount, primarily as a result of the divestiture of our preclinical small molecule programs in March 2024, and a decrease of $2.9 million in other external research and development expenses associated with the divestiture of our preclinical small molecule programs.

The decrease in research and development expenses of approximately $19.4 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, was primarily attributable to the following:

• a decrease of $14.0 million in ETV:IDS program external expenses due to $30.0 million in milestone-related expense in the first quarter of 2023 pursuant to our acquisition of F-star Gamma, which was triggered by a clinical milestone for the ETV:IDS program.

This decrease was partially offset by increased spend in 2024 related to our ongoing Phase 1/2 study and our potentially registrational Phase 2/3 study;

• decreases of $7.9 million and $6.9 million in personnel related expenses and other unallocated research and development expenses, respectively, primarily as a result of the divestiture of our preclinical small molecule programs in March 2024;

• a decrease of $2.0 million in PTV:PGRN program external expenses as the TAK-594/DNL593 (PTV:PGRN) Phase 1/2 study was previously voluntarily paused;

• a decrease of $6.7 million in other external research and development expenses primarily due to elevated facility costs in the nine months ended September 30, 2023 as a result of accelerated depreciation on leasehold improvements associated with the termination of the former SLC Lease.

These decreases were partially offset by increases of $9.4 million and $4.1 million in eIF2B and ETV:SGSH program external expenses, respectively, reflecting the continued progress of these programs in clinical trials, and an increase of $4.6 million in TV platform and other program external expenses, reflecting our continued investment in our TV-enabled product candidates.

General and administrative expenses.

General and administrative expenses were $25.2 million for the three months ended June 30, 2024 compared to $26.1 million for the three months ended June 30, 2023.

The decrease of $0.9 million was primarily attributable to a decrease of $1.1 million in personnel-related expenses consisting of employee compensation and stock-based compensation expense, partially offset by combined increases of $0.2 million in professional services, facilities and other corporate costs.

General and administrative expenses were $50.4 million for the six months ended June 30, 2024 compared to $53.3 million for the six months ended June 30, 2023.

The decrease of $2.9 million was primarily attributable to $2.2 million of combined decreases in professional services, facilities and other corporate costs and $0.7 million of decreased personnel-related expenses consisting of employee compensation and stock-based compensation expense.

General and administrative expense was $24.9 million for the three months ended September 30, 2024, and $25.3 million for the same period in 2023.

General and administrative expenses were $75.4 million for the nine months ended September 30, 2024 compared to $78.6 million for the nine months ended September 30, 2023.

The decrease of $3.2 million was primarily attributable to $2.5 million of combined decreases in professional services and facilities costs, and $1.8 million of decreased personnel-related expenses consisting of employee compensation and stock-based compensation expenses as a result of the divestiture of our preclinical small molecule programs in March 2024, partially offset by an increase of $1.1 million in other corporate costs.

Gain from divestiture of small molecule programs.

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Sources of Liquidity

As of June 30, 2024, we had cash, cash equivalents and marketable securities in the amount of $1.35 billion.

As of September 30, 2024, we had cash, cash equivalents and marketable securities in the amount of $1.28 billion.

We fund our operations primarily with the proceeds from the sale of common stock and payments received from our collaboration partners, including those received under agreements with Takeda, Sanofi, and Biogen.

We have sold common stock and other securities in public offerings, a private placement, and stock purchase agreements with Takeda and Biogen.

Through June 30, 2024 we have obtained aggregate net proceeds of approximately $754.4 million from public offerings of our common stock, including $296.2 million obtained through the sale of 11.9 million shares of common stock in October 2022.

Under stock purchase agreements with collaboration partners we have received a further $575.0 million through June 30, 2024 .

Through September 30, 2024 we have obtained aggregate net proceeds of approximately $754.4 million from public offerings of our common stock, including $296.2 million obtained through the sale of 11.9 million shares of common stock in October 2022.

Under stock purchase agreements with collaboration partners we have received a further $575.0 million through September 30, 2024 .

Further, in February 2024 we received net proceeds of approximately $499.3 million from our private placement through the sale of approximately 3.2 million shares of common stock and pre-funded warrants to purchase a pproximately 26.0 million shares of our common stock .

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To date, no shares have been sold under the equity distribution agreement.

Pursuant to our collaboration and research funding agreements with Takeda, Sanofi, Biogen and an unrelated third party, through June 30, 2024 we have received upfront, option and milestone payments of $115.0 million , $225.0 million, $565.0 million and $12.5 million, respectively, and have also received $45.8 million and $16.2 million of gross cost sharing reimbursements from Takeda and Biogen, respectively, and received $13.7 million in specified reimbursements from Sanofi.

Pursuant to our collaboration and research and development funding agreements with Takeda, Sanofi, Biogen and an unrelated third party, through September 30, 2024 we have received upfront, option and milestone payments of $115.0 million , $225.0 million, $565.0 million and $25.0 million, respectively, and have also received $47.2 million and $16.2 million of gross cost sharing reimbursements from Takeda and Biogen, respectively, and received $13.7 million in specified reimbursements from Sanofi.

Future Funding Requirements and Commitments

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

We have an accumulated deficit of $1.32 billion through June 30, 2024.

We have an accumulated deficit of $1.42 billion through September 30, 2024.

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

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Our existing commitments primarily relate to our obligations under existing lease agreements, and certain clinical and manufacturing agreements, including the DMSA with Lonza Sales AG ("Lonza") for the development and manufacture of biologic products.

As of June 30, 2024, operating lease liabilities were $48.8 million.

Under the SLC lease which was executed in April 2023, we have future undiscounted lease payments totaling approximately $13.4 million.

Under the DMSA with Lonza, and certain other clinical and manufacturing agreements, we had total non-refundable purchase commitments as of June 30, 2024 of $56.5 million, with certain amounts subject to cost sharing with Takeda.

As of September 30, 2024, the operating lease liability was $46.9 million and the finance lease liability was $5.7 million.

Under the DMSA with Lonza, and certain other clinical and manufacturing agreements, we had total non-refundable purchase commitments as of September 30, 2024 of $49.0 million, with certain amounts subject to cost sharing with Takeda.

While the lease obligations span multiple years, the majority of the purchase commitments with Lonza and other clinical and manufacturing agreements are due within twelve months, with some spanning several years.

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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):

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash used in operating activities $ (263,979) $ (259,334)

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Net Cash Used In Operating Activities

During the six months ended June 30, 2024, net cash used in operating activities was $204.8 million, which consisted of a net loss of $200.8 million, adjusted by non-cash items primarily related to stock-based compensation expense, depreciation and amortization, net accretion of discounts on marketable securities, non-cash rent expenses, and the non-cash gain on divestiture of small molecule programs.

Cash used in operating activities was also driven by changes in our operating assets and liabilities, the most significant of which was an increase in other non-current assets related to costs associated with the new Salt Lake City manufacturing facility during the six months ended June 30, 2024.

Net Cash Used In Investing Activities

During the six months ended June 30, 2024, net cash used in investing activities was $354.6 million, which consisted of $955.8 million of purchases of marketable securities and $6.9 million of capital expenditures to purchase property and equipment, partially offset by $608.1 million in proceeds from maturities and sales of marketable securities.

During the nine months ended September 30, 2024, net cash used in operating activities was $264.0 million, which consisted of a net loss of $308.0 million, adjusted by non-cash items primarily related to stock-based compensation expense, depreciation and amortization, net accretion of discounts on marketable securities, non-cash rent expenses, and the non-cash gain on divestiture of small molecule programs.

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

Net Cash (Used In) Provided By Investing Activities

During the nine months ended September 30, 2024, net cash used in investing activities was $261.0 million, which consisted of $1.06 billion of purchases of marketable securities and $10.8 million of capital expenditures to purchase property and equipment, partially offset by $806.1 million in proceeds from maturities and sales of marketable securities.

Net Cash Provided By Financing Activities

During the six months ended June 30, 2024, cash provided by financing activities was $507.0 million which consisted of $499.3 million of net proceeds from the sale of common stock and pre-funded warrants in a private placement in February 2024, as well as proceeds from the exercise of options to purchase common stock and purchases of ESPP shares.

During the nine months ended September 30, 2024, cash provided by financing activities was $488.5 million which consisted of $499.3 million of net proceeds from issuance of common stock and pre-funded warrants in a private placement in February 2024 and $13.2 million in proceeds from the exercise of stock options and the Company's ESPP, partially offset by an aggregate of $24.0 million of payments related to our finance lease.

Critical Accounting Estimates

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In our “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, 2023, as filed with the SEC on February 28, 2024, we described the accounting estimates that we believe involve a significant level of estimation uncertainty which could have a material impact on our financial condition or results of operations.

There have been no material changes to these critical accounting estimates during the six months ended June 30, 2024.

There have been no material changes to these critical accounting estimates during the nine months ended September 30, 2024.

Recent Accounting Pronouncements

There have been no new accounting pronouncements or changes to accounting pronouncements during the six months ended June 30, 2024 , as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024, that are of significance or potential significance to us.

There have been no new accounting pronouncements or changes to accounting pronouncements during the nine months ended September 30, 2024 , as compared to the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024, 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