What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-11-06 compared with 2020-08-07 · 95 added, 75 removed, 174 unchanged (49% of the section changed)

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We are also conducting IND-enabling preclinical studies of ERSG compounds for autosomal dominant polycystic kidney disease (ADPKD) and in rare inherited retinal disorders (IRDs) by intravitreal administration with an initial focus on Usher Syndrome.

Our preclinical candidate pool consists of a library of novel ERSG drug candidates identified based on read-through potential and cytoplasmic ribosomal selectivity.

We hold worldwide development and commercialization rights to ELX-02 and other novel compounds in our read-through library, for all indications, in all territories, under a license from the Technion Research and Development Foundation Ltd.

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The results from the renal impairment study provided support for both continuing our clinical development programs and evaluating the suitability of our ERSG library for development in additional renal diseases, including ADPKD .

Our preclinical candidate pool consists of a library of novel ERSG drug candidates identified based on read-through potential and cytoplasmic ribosomal selectivity.

Our research and development strategy targets rare or ultra-rare diseases where a high unmet medical need exists, a nonsense mutation-bearing patient population is established, preclinical read-through can be established in predictive personalized medicine models, and a defined path through Orphan Drug development, regulatory approval, patient access and commercialization is identified.

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Our scientific manuscript titled “ELX-02 generates protein via premature stop codon read-through without inducing native stop codon read-through protein” was published in the August 2020 issue of the Journal of Pharmacology and Experimental Therapeutics (JPET).

This manuscript demonstrates that while ELX-02 mediates read-through of premature stop codons, the fidelity of stop codons found at the end of healthy transcripts is maintained.

This manuscript demonstrates that while ELX-02 mediates read-through of premature stop codons, the fidelity of native stop codons found at the end of healthy transcripts is maintained.

This indicates that translation integrity is preserved with target-therapeutic exposure of ELX-02, consistent with the favorable tolerability profile across our preclinical and clinical data sets.

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Additionally, the results from the renal impairment study were presented at the 2019 American Society of Nephrology (ASN) Kidney Week in November 2019.

Our scientific review written by Professor Eitan Kerem, M.D., Senior Attending Physician at the Hadassah CF Center in Jerusalem, Israel and Senior Medical Consultant to Eloxx, titled “ELX-02:

an investigational read-through agent for the treatment of nonsense mutation-related genetic disease” was published in October 2020 by the Expert Opinion on Investigational Drugs Journal .

This manuscript details the development of ELX-02 for the restoration of functional protein in nonsense-mediated disease in support of our ongoing Phase 2 trials.

Our Phase 2 cystinosis trial involved two sequential cohorts with three escalating doses in three patients per cohort.

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These encouraging results also provide a basis for expansion to studies of additional kidney diseases caused by nonsense mutations , such as ADPKD.

Our Phase 2 c ystic f ibrosis clinical trial program for ELX-02 is being conducted at leading global investigator sites in Europe, Israel and the United States .

On March 25, 2020, we announced that enrollment in these trials ha d been paused temporarily in response to the global COVID-19 pandemic in order to avoid unnecessary exposure in at-risk populations, to maintain the integrity of our study data and to support global healthcare providers in their commitment to ensure patient safety.

On June 17, 2020, we announced that enrollment in our Phase 2 clinical trial in cystic fibrosis ha d been resumed in Israel and Europe, and that our U.S.

trial remains temporarily paused due to the COVID-19 pandemic.

COVID-19 is rapidly evolving and we continue to work closely with our clinical sites and investigators.

We remain committed to completing enrollment in these Phase 2 proof of concept clinical trials and reporting top line data as soon as feasible.

, the Cystic Fibrosis Foundation (“CF Foundation”) is providing funding for a portion of the trial and we have form ed a joint program advisory group with the CF Foundation focused on the development of ELX-02 for cystic fibrosis.

The Cystic Fibrosis Therapeutics Development Network (“TDN”) has sanctioned the Phase 2 study protocol (ClinicalTrials.gov Identifiers:

NCT04126473 and NCT04135495) , which is being conducted at TDN member sites.

In Europe and Israel, Professor Eitan Kerem, M.D., Head of the Division of Pediatrics, Children’s Hospital, Hadassah Medical Center in Israel, is the global lead investigator.

Our Phase 2 cystic fibrosis clinical trial program for ELX-02 is being conducted at leading global investigator sites in Europe, Israel and the United States.

On March 25, 2020, we announced that enrollment in these trials had been paused temporarily in response to the global COVID-19 pandemic in order to avoid unnecessary exposure in at-risk populations, to maintain the integrity of our study data and to support global healthcare providers in their commitment to ensure patient safety.

On June 17, 2020, we announced that enrollment in our Phase 2 clinical trial in cystic fibrosis had been resumed in Israel and Europe, and on August 12, 2020, we announced that enrollment in our Phase 2 clinical trial in cystic fibrosis has been resumed in the U.S.

The COVID-19 pandemic continues to evolve, and we continue to work closely with our clinical sites and investigators.

We are also evaluating additional clinical sites in other countries where patient enrollment may be feasible.

We remain committed to completing enrollment in these Phase 2 proof of concept clinical trials and reporting top line data in the first half of 2021, which is contingent on no further disruptions due to the COVID-19 pandemic.

Several planned Safety Review Committee meetings have occurred and allowed dose escalation up to the top dose level with no drug-related serious adverse events reported to date.

We have had multiple patients progressing through the four-dose escalation range.

In the U.S., the Cystic Fibrosis Foundation (“CF Foundation”) is providing funding for a portion of the trial and we have formed a joint program advisory group with the CF Foundation focused on the development of ELX-02 for cystic fibrosis.

The Cystic Fibrosis Therapeutics Development Network (“TDN”) has sanctioned the Phase 2 study protocol, which is being conducted at TDN member sites.

Additional information about our clinical trials can be found at www.ClinicalTrials.gov (Identifiers:

NCT04126473 and NCT04135495).

Professor Eitan Kerem, M.D., former Head of the Division of Pediatrics, Children’s Hospital, Hadassah Medical Center in Israel, has joined Eloxx as a Senior Medical Consultant.

Ahmet Uluer, Director of the Adult Cystic Fibrosis Program at the Boston Children’s Hospital/Brigham and Women’s Hospital CF Center, is the lead study investigator.

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The in-person European Cystic Fibrosis Society conference in Lyon, France scheduled for June 2020 was cancelled, and we withdrew our abstract.

We plan to present data for ELX-02 in cystic fibrosis at the North American Cystic Fibrosis Conference, which will be conducted virtually in late October.

We are also evaluating the suitability of our ERSG library for development in rare renal diseases associated with nonsense mutations, such as ADPKD.

ADPKD is a relatively common inherited genetic kidney disease occurring in between one in 400 and one in 1,000 patients and is the fourth leading cause of end-stage renal disease in the United States.

Over 25% of the primary genetic changes that cause ADPKD are nonsense mutations, where a premature stop codon in the gene leads to a truncated, often unstable, protein.

We have evaluated the three most relevant ADPKD nonsense mutations in an in vitro read-through assay and have demonstrated significant levels of read-through for ELX-02 and several library compounds, which is the first step in our preclinical development toward an IND.

We continue to progress our ERSG pipeline in IRDs, another area of high unmet medical need, that are associated with vision loss and blindness.

There are over 300 IRDs associated with nonsense mutations.

We recently reported on a critical milestone demonstrating that several of our library compounds successfully reach retinal disorder-relevant tissue layers and can restore protein production in an animal model.

These data support that our ERSG compounds are suitable for reaching and promoting read-through in target cells within the retina.

We had planned to present these data at the Association for Research in Vision and Ophthalmology (ARVO) Annual Meeting in May 2020, but the meeting was cancelled due to the global COVID-19 pandemic.

As an alternative, we submitted a recorded video presentation which became available on ARVO’s website May 6, 2020.

Our IRD research also includes exploring multiple sustained release formulation technologies, and in vitro release rates achieved to date have been consistent with our target release profile of one to three months.

We presented data from two scientific abstracts at the North American Cystic Fibrosis Virtual Conference (NACFC).

The two abstracts were also showcased in the NACFC virtual poster gallery and electronically published as a supplement to Pediatric Pulmonology.

The live sessions and discussions took place through October 23, 2020.

These virtual posters are available to registered attendees on the NACFC online conference platform.

The preclinical study results demonstrate ELX-02’s selectivity for read-through of premature stop codons versus native stop codons and its ability to restore production of functional CFTR in patient-derived organoids.

We believe there is a significant unmet medical need in the treatment of cystic fibrosis patients carrying nonsense mutations on one or both alleles of the CFTR gene.

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clinical trials and eligibility for grant funding opportunities that can be used for clinical trial costs.

We are also evaluating the suitability of our ERSG library for development in rare renal diseases associated with nonsense mutations, such as ADPKD.

Over 25% of the primary genetic changes that cause ADPKD are nonsense mutations, where a premature stop codon in the gene leads to a truncated, often unstable, protein.

We continue to progress our ERSG pipeline in IRDs , another area of high unmet medical need, that are associated with vision loss and blindness .

There are over 300 IRD s associated with nonsense mutations.

W e recently reported on a critical milestone demonstrating that several of our library compounds successfully reach retinal disorder-relevant tissue layers and can restore protein production in an animal model.

These data support that our ERSG compounds are suitable for reaching and promoting read-through in target cells within the retina.

We had plan ned to present these data at the Association for Research in Vision and Ophthalmology (ARVO) Annual Meeting in May 2020 , but the meeting was cancelled due to the global COVID-19 pandemic.

As an alternative, we submitted a recorded video presentation which became available on ARVO’s website May 6, 2020 .

Our scientific manuscript titled “ Intravitreal administration of small molecule read-through agents demonstrate functional activity in a nonsense mutation mouse model ” was published in October 2020 by the Journal of Experimental Eye Research .

This manuscript demonstrates that multiple small molecules in our ERSG library mediate dose-dependent read-through at the back of the eye after a single intravitreal injection .

Collectively, these manuscripts demonstrate the wide-ranging potential of our small molecule read-through approach to rare genetic disorders mediated by nonsense mutations;

from targeted delivery for inherited retinal disorders to systemic delivery for multi-system disorders like cystic fibrosis.

On February 24, 2020, our Board of Directors approved a leadership and organizational realignment aimed at supporting our efforts to improve operating performance and concentrate development efforts on our core programs.

organizational realignment reduce d managerial layers and consolidate d roles across the organization, resulting in the elimination of 13 full-time positions during the first quarter of 2020 .

We incur red a resulting one-time pre-tax charge of $ 4.0 million during the first quarter of 2020.

The organizational realignment reduced managerial layers and consolidated roles across the organization, resulting in the elimination of 13 full-time positions during the first quarter of 2020.

We incurred a resulting one-time pre-tax charge of $4.0 million during the first quarter of 2020.

The outbreak of COVID-19 and the preventative or protective actions that we, our employees, consultants, suppliers, contract research organizations (CROs), and other partners or governments may take may significantly disrupt our business operations.

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To date, the pandemic has not had a material adverse impact on our financial condition, and we have not had to lay off or furlough any employees.

Operations continued even though our clinical trials were temporarily paused.

Operations have continued even though our clinical trials were temporarily paused.

Both Phase 2 clinical trials have now resumed.

We are evaluating various alternatives to remain flexible and adapt to changing circumstances that may arise in the near and long term.

We continue to monitor our operations, states of affairs in the regions in which we and our business partners operate and conduct research and clinical trial activities, and applicable government recommendations.

As a result, we have made modifications to our normal operations, including prohibitions on business travel and meetings, permitting employees to work remotely and the implementation of COVID-19 workplace safety guidelines to screen employees and office visitors for COVID-19 symptoms upon entering our offices.

As a result, we have made modifications to our normal operations, including restrictions on business travel and meetings, permitting employees to work remotely and the implementation of COVID-19 workplace safety guidelines to screen employees and office visitors for COVID-19 symptoms upon entering our offices.

We have also implemented one-way traffic flows, social-distanced workspaces, additional cleaning requirements and mandatory face coverings for common spaces and provided components of Personal Protective Equipment (PPE) for all employees working out of our various office locations.

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In addition, we have experienced and will continue to experience disruptions to our business operations resulting from quarantines, self-isolations and travel and other restrictions on our employees which may impact their ability to perform their job responsibilities.

The extent and severity of the impact of the current global health crisis on our business and clinical trials will be determined largely by the ability of patients and prospective patients in our clinical trials to access trial sites, the ability of personnel from our CROs to administer our drug in accordance with trial protocols and our ability to monitor and communicate effectively with our CROs, staff at clinical trial sites and principal investigators.

In addition, the impact of the COVID-19 pandemic on the operations of the FDA and other health authorities may delay potential advancement of our product candidates.

The extent and severity of the impact of the current global health crisis on our business and clinical trials will be determined largely by the ability of patients and prospective patients in our clinical trials to access trial sites, the ability of personnel from our CROs to oversee the administration of our drug in accordance with trial protocols and our ability to monitor and communicate effectively with our CROs, staff at clinical trial sites and principal investigators.

In addition, the

impact of the COVID-19 pandemic on the operations of the FDA and other health authorities may delay potential advancement of our product candidates.

Critical Accounting Policies and Use of Estimates

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The critical accounting policies that we believe impact significant judgments and estimates used in the preparation of our financial statements presented in this Report are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 Annual Report on Form 10-K.

There have been no material changes to our critical accounting p o licies through June 30, 2020 , from those discussed in our Annual Report on Form 10-K filed with the SEC on March 6 , 20 20 .

There have been no material changes to our critical accounting policies through September 30, 2020, from those discussed in our Annual Report on Form 10-K filed with the SEC on March 6, 2020.

Results of Operations

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

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Loss from operations

Other expense (income), net

Other expense, net

Research and development expense

Research and development expenses were $3.5 million for the three months ended June 30, 2020 compared to $7.3 million for the same period in 2019, a decrease of $3.8 million.

The decrease in research and development expenses was primarily related to $2.9 million in reduced fees incurred for subcontractors, consultants and advisors in connection with ongoing clinical trials and research and development activities, due to delays in enrollment, $0.5 million decrease in stock based compensation and a $0.4 million decrease due to a reduction in headcount and related salaries for a portion of the 2020 period, and reduction in other personnel related costs.

Research and development expenses for the three months ended June 30, 2020 and 2019 included non-cash stock-based compensation expense totaling $0.3 million and $0.7 million, respectively.

Research and development expenses were $8.1 million for the six months ended June 30, 2020 compared to $13.4 million for the same period in 2019, a decrease of $5.3 million.

The decrease in research and development expenses was primarily related to $4.5 million in reduced fees incurred for subcontractors, consultants and advisors in connection with ongoing clinical trials and research and development activities, due to delays in enrollment and a $0.8 million decrease in stock based compensation.

Research and development expenses for the six months ended June 30, 2020 and 2019 included non-cash stock-based compensation expense totaling $0.5 million and $1.3 million, respectively.

Research and development expenses were $3.2 million for the three months ended September 30, 2020 compared to $6.8 million for the same period in 2019, a decrease of $3.6 million.

The decrease in research and development expenses was primarily related to $2.7 million in reduced fees incurred for subcontractors, consultants and advisors in connection with ongoing clinical trials and research and development activities, due to delays in clinical trial enrollment resulting from the COVID-19 pandemic , a $0.4 million decrease in stock-based compensation and a $0.5 million decrease in salaries and other personnel-related costs due to lower headcount during the 2020 period.

Research and development expenses for the three months ended September 30, 2020 and 2019 included non-cash stock-based compensation expense totaling $0.3 million and $0.7 million, respectively.

Research and development expenses were $11.3 million for the nine months ended September 30, 2020 compared to $20.2 million for the same period in 2019, a decrease of $8.9 million.

The decrease in research and development expenses was primarily related to $7.2 million in reduced fees incurred for subcontractors, consultants and advisors in connection with ongoing clinical trials and research and development activities, due to delays in clinical trial enrollment resulting from the COVID-19 pandemic , a $1.2 million decrease in stock based compensation and a $0.4 million decrease in salaries and other personnel-related costs due to lower headcount during the 2020 period.

Research and development expenses for the nine months ended September 30, 2020 and 2019 included non-cash stock-based compensation expense totaling $0.8 million and $2.0 million, respectively.

General and administrative expenses

General and administrative expenses were $4.1 million for the three months ended June 30, 2020, compared to $7.0 million for the same period in 2019, a decrease of $2.9 million.

The decrease in general and administrative expenses was primarily due to decreases of $0.8 million in personnel and related costs due to a reduction in headcount and related salaries for a portion of the 2020 period, $0.6 million in stock-based compensation and $1.5 million in professional services and other infrastructure-related costs.

General and administrative expenses for the three months ended June 30, 2020 and 2019 included non-cash stock-based compensation expense totaling $1.7 million and $2.3 million, respectively.

General and administrative expenses were $9.3 million for the six months ended June 30, 2020, compared to $12.9 million for the same period in 2019, a decrease of $3.6 million.

General and administrative expenses were $3.1 million for the three months ended September 30, 2020, compared to $6.0 million for the same period in 2019, a decrease of $2.9 million.

The decrease in general and administrative expenses was primarily due to decreases of $0.8 million in personnel and related costs due to a reduction in headcount and related salaries for the 2020 period, $1.1 million in stock-based compensation and $1.0 million in professional services and other infrastructure-related costs.

General and administrative expenses for the three months ended September 30, 2020 and 2019 included non-cash stock-based compensation expense totaling $1.1 million and $2.2 million, respectively.

General and administrative expenses were $12.3 million for the nine months ended September 30, 2020, compared to $18.9 million for the same period in 2019, a decrease of $6.6 million.

The decrease in general and administrative expenses was primarily due to decreases of $1.7 million in personnel and related costs due to a reduction in headcount and related salaries for a portion of the 2020 period, $2.2 million in stock-based compensation and $2.7 million in professional services and other infrastructure-related costs.

General and administrative expenses for the six months ended June 30, 2020 and 2019 included non-cash stock-based compensation expense totaling $3.4 million and $4.4 million, respectively.

Restructuring ch arges

Restructuring charges of $4.0 million for the six months ended June 30, 2020 resulted from the leadership and organizational realignment during the first quarter of 2020.

General and administrative expenses for the nine months ended September 30, 2020 and 2019 included non-cash stock-based compensation expense totaling $4.5 million and $6.6 million, respectively.

Restructuring charges

Restructuring charges of $4.0 million for the nine months ended September 30, 2020 resulted from the leadership and organizational realignment during the first quarter of 2020.

The total included $1.9 million related to contract termination and employee separation costs (primarily severance and benefits) and $2.1 million of non-cash stock compensation, relating to accelerated vesting of executive stock awards.

There were no similar charges during the three months ended June 30, 2020.

Other expense (income), net

We recorded $0.3 million in other expense, net for the three months ended June 30, 2020, compared to $0.1 million for the same period in 2019.

There were no similar charges during the three months ended September 30, 2020.

Other expense, net

We recorded $0.3 million in other expense, net for the three months ended September 30, 2020, compared to $0.1 million for the same period in 2019.

The increase in other expense, net was primarily due to lower interest income.

We recorded $0.5 million in other expense, net for the six months ended June 30, 2020, compared to $0.1 million for the same period in 2019.

We recorded $0.8 million in other expense, net for the nine months ended September 30, 2020, compared to $0.2 million for the same period in 2019.

The increase in other expense, net was primarily due to lower interest income.

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To date, we have not generated revenue from sales of any product or service.

Although the impact of the COVID-19 pandemic on clinical operations and trial enrollment cannot fully be determined, we believe that our cash, cash equivalents, and marketable securities of $37.1 million at June 30, 2020, will enable us to meet the anticipated cash needs required to reach top line Phase 2 data in cystic fibrosis and maintain our current and planned operations through at least the next 12 months from the issuance of this Report.

Although the impact of the COVID-19 pandemic on clinical operations and trial enrollment cannot fully be determined, we believe that our cash and cash equivalents of $30.6 million at September 30, 2020, will enable us to meet the anticipated cash needs required to reach top line Phase 2 data in cystic fibrosis and maintain our current and planned operations through at least the next 12 months from the issuance of this Report.

Since our inception, we have incurred significant operating losses.

Our net losses were $(21.8) million for the six months ended June 30, 2020, and $(50.9) million for the year ended December 31, 2019.

As of June 30, 2020, we had an accumulated deficit of $(158.9) million.

Our net losses were $(28.5) million for the nine months ended September 30, 2020, and $(50.9) million for the year ended December 31, 2019.

As of September 30, 2020, we had an accumulated deficit of $(165.5) million.

To date, we have financed our operations primarily through equity capital investments, and to a lesser extent, from loans and grants.

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advance ELX-02 and/or other product candidates further into clinical development;

continue to experience delays in enrollment and completion of our clinical trials due to the COVID-19 pandemic or otherwise;

experience additional delays in enrollment and completion of our clinical trials due to the COVID-19 pandemic or otherwise;

continue the preclinical development of our research programs and advance candidates into clinical trials;

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We may never achieve profitability, and unless and until we do, we will continue to need to raise additional cash to fund our operations.

On February 24, 2020, our Board of Directors approved a leadership and organizational re-alignment, which is expected to achieve annual cost savings of approximately $4.9 million primarily related to salaries and benefits, with

anticipated fiscal year 2020 savings of approximately $2.4 million, net of severance costs.

Our cash, cash equivalents, and marketable securities are highly liquid investments with original maturities of one year or less at the date of purchase and consist of cash in operating accounts and secured investments, primarily U.S.

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Interest payments are payable monthly following the funding of the loan.

On June 30, 2020, the interest rate was 5.75%.

We commenced making principal and interest payments on the outstanding balance of the loan on February 1, 2020, which is payable in 36 equal monthly installments.

On September 30, 2020, the interest rate was 5.75%.

We commenced making payments on the outstanding principal balance of the loan on February 1, 2020, which is payable in 36 equal monthly installments.

Amounts outstanding under the loan are due and payable on January 1, 2023.

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The Loan Agreement also contains representations and warranties by us and the Lenders and indemnification provisions in favor of the Lenders and customary covenants (including limitations on other indebtedness, liens, acquisitions, investments and dividends, but no financial covenants), and events of default (including payment defaults, breaches of covenants following any applicable cure period, a material impairment in the perfection or priority of the Lenders’ security interest in the collateral, and events relating to bankruptcy or insolvency).

In April 2020, we entered into a loan agreement with Silicon Valley Bank (“SVB”) under the U.S.

In April 2020, we entered into a loan agreement with SVB under the U.S.

Small Business Administration (the “SBA”) Paycheck Protection Program (the “PPP”) pursuant to the Coronavirus Aid, Relief and Economic Security Act of 2020 (the “CARES Act”) and received loan proceeds of $0.8 million (the “PPP Loan”).

We expect to use the loan proceeds for payroll and other covered costs in accordance with the relevant terms and conditions of the CARES Act.

We expect to use the loan proceeds for payroll

and other covered costs in accordance with the relevant terms and conditions of the CARES Act.

We issued a promissory note for the PPP Loan with a maturity date of April 21, 2022 and an interest rate of 1.0% per annum.

Monthly payments of principal and interest will be due beginning on November 21, 2020, although interest accrues from the issuance date.

Monthly payments of principal and interest will be due beginning on September 21, 202 1 , although interest accrues from the issuance date.

We may prepay the PPP Loan without penalty or premium, and the promissory note provides for customary events of default.

A PPP loan may be partially or entirely forgiven based on employee retention for the 24-week period starting on the loan date through September 2020, and the use of loan proceeds for payroll or other specified costs during the same period.

A PPP loan may be partially or entirely forgiven based on employee retention for the 24-week period starting on the loan date through October 2020, and the use of loan proceeds for payroll or other specified costs during the same period.

Forgiveness is also based on the employer maintaining or restoring headcount and maintaining salary levels.

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Any loan forgiveness will be made subject to SVB approval in accordance with SBA requirements .

On June 24, 2019, we completed an underwritten public offering of 3,833,334 shares of common stock at the public offering price of $9.00 per share and received gross proceeds of approximately $34.5 million, before deducting underwriting discounts and commissions of $2.1 million and estimated offering expenses of $0.2 million.

The following table summarizes our sources and uses of cash for each of the periods presented (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Net cash used in operating activities

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Net cash (used in) provided by financing activities

Our operating activities used cash of $18.2 million and $18.8 million during the six months ended June 30, 2020 and 2019, respectively.

For the six months ended June 30, 2020, net cash used in operating activities resulted primarily from our net loss of $(21.8) million and total changes in working capital of $(3.0) million partially offset by total non-cash charges of $6.6 million.

Our operating activities used cash of $23.5 million and $30.1 million during the nine months ended September 30, 2020 and 2019, respectively.

For the nine months ended September 30, 2020, net cash used in operating activities resulted primarily from our net loss of $(28.5) million and total changes in working capital of $3.4 million partially offset by total non-cash charges of $8.3 million.

Non-cash charges primarily related to $7.4 million of stock-based compensation, $0.5 million of amortization of lease assets, and $0.4 million of debt discount amortization.

Changes in working capital were primarily related to decreases of $1.2 million in accrued expenses, $1.1 million in accounts payable and $0.3 million in operating lease liabilities, and in increase of $0.4 million in prepaid expenses and other current assets.

For the six months ended June 30, 2019, net cash used in operating activities resulted primarily from our net loss of $26.4 million partially offset by non-cash charges of $5.7 million related to stock-based compensation, $50 thousand of depreciation expense and $0.2 million of debt discount amortization;

and total changes in working capital of $1.5 million.

Our investing activities provided cash of $27.0 million and used cash of $26.9 million during the six months ended June 30, 2020 and 2019, respectively.

For the six months ended June 30, 2020, cash provided by investing activities was primarily related to $27.0 million of proceeds from the maturity of marketable securities.

For the six months ended June 30, 2019, net cash used in investing activities consisted primarily of $33.6 million in purchases of marketable securities, offset by $6.8 million of proceeds from the maturity of marketable securities .

Our financing activities used cash of $0.9 million during the six months ended June 30, 2020 and provided cash of $46.4 million during the six months ended June 30, 2019.

For the six months ended June 30, 2020, net cash used in financing activities consisted primarily of $2.1 million in term loan principal repayments, offset by $0.8 million received from the PPP Loan and $0.4 million in advances received from collaboration partners.

Net cash provided by financing activities for the six months ended June 30, 2019 resulted primarily from the issuance of debt of $14.7 million in January 2019 and proceeds of $32.7 million from sales of common stock offset by $1.1 million of taxes paid upon the vesting of restricted stock units.

Changes in working capital were primarily related to decreases of $1.7 million in accrued expenses, $1.2 million in accounts payable, $0.3 million in operating lease liabilities, and an increase of $0.1 million in prepaid expenses and other assets.

For the nine months ended September 30, 2019, net cash used in operating activities resulted primarily from our net loss of $(39.2) million partially offset by total non-cash charges of $9.2 million and total changes in working capital of $0.1 million.

Non-cash charges primarily related to $8.6 million of stock-based compensation, $0.3 million of amortization of lease assets, $0.4 million of debt discount amortization and $0.1 million of depreciation expense, offset by $0.2 million of discount amortization on our investments.

Changes in working capital were primarily related to an increase in prepaid expenses and other current assets of $0.2 million and advances from collaboration partners of $0.4 million related to the achievement of a milestone in connection with the CF Foundation funding commitment for our cystic fibrosis development program in the U.S.

Our investing activities provided cash of $33.8 million and used cash of $42.6 million during the nine months ended September 30, 2020 and 2019, respectively.

For the nine months ended September 30, 2020, cash provided by investing activities was primarily related to $33.8 million of proceeds from maturities of marketable securities.

For the nine months ended September 30, 2019, cash used in investing activities consisted primarily of $56.0 million in purchases of marketable securities, offset by $13.5 million of proceeds from maturities of marketable securities .

Our financing activities used cash of $2.2 million during the nine months ended September 30, 2020 and provided cash of $46.3 million during the nine months ended September 30, 2019.

For the nine months ended September 30, 2020, net cash used in financing activities consisted primarily of $3.3 million in term loan principal repayments, offset by $0.8 million received from the PPP Loan and $0.4 million in advances received from collaboration partners.

For the nine months ended September 30, 2019, net cash provided by financing activities resulted primarily from net proceeds of $32.7 million from sales of common stock and the issuance of debt of $15.0 million in January 2019 offset by $1.2 million of taxes paid upon the vesting of restricted stock units and $0.3 million of debt issuance costs.

Equity Sales Agreement

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis