What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-03-15 compared with 2021-03-05 · 141 added, 90 removed, 200 unchanged (54% of the section changed)

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As a result of many factors, including those factors set forth in the “Risk Factors” section of this Form Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from rare inherited genetic disorders of hemoglobin, known as hemoglobinopathies.

Our pipeline is built on the differentiated therapeutic potential of our initial product candidate, IMR-687, which is an oral, once-a-day, potentially disease-modifying treatment for sickle cell disease, or SCD, and ß-thalassemia.

IMR-687 is a highly selective, potent small molecule inhibitor of phosphodiesterase-9, or PDE9, that has a multimodal mechanism of action that acts primarily on red blood cells, and has the potential to act on white blood cells, adhesion mediators and other cell types that are implicated in these disorders.

We recently completed a Phase 2a clinical trial of IMR-687 in adult patients with SCD and are currently conducting an open label extension, or OLE, clinical trial, which allows patients from the Phase 2a clinical trial to continue into a long-term four-year trial to test safety and measure tolerability of IMR-687 .

In the second quarter of 2020, we initiated a Phase 2b clinical trial of IMR-687 for the treatment of patients with SCD and a Phase 2b clinical trial of IMR-687 for the treatment of patients with ß-thalassemia.

We are currently enrolling patients in each trial and expect to report interim data from each of these trials in the second half of 2021.

We continue to evaluate the impact of the COVID-19 pandemic on these Phase 2b trials, as discussed below, and therefore, our estimated timelines for these clinical trials could be delayed.

In addition, we recently completed preclinical research of IMR-687 in heart failure with preserved ejection fraction, or HFpEF, and are developing a Phase 2 protocol to support potential future clinical development of IMR-687 in this indication.

Since our inception in 2016, our operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and performing research and development of IMR-687.

To date, we have funded our operations primarily through the sale of common stock in our initial public offering, or IPO, and the sale of convertible preferred stock.

In March 2020, we completed an IPO of our common stock and issued and sold 4,700,000 shares of common stock at a public offering price of $16.00 per share, resulting in gross proceeds of $75.2 million.

In April 2020, the underwriters exercised their option to purchase additional shares in full to purchase 705,000 additional shares of common stock for aggregate gross proceeds of $11.3 million.

Inclusive of the underwriters’ option to purchase additional shares, we received approximately $76.5 million in net proceeds from the IPO after deducting $10.0 million of underwriting discounts and commissions and offering expenses.

Upon completion of the IPO, all 70,378,661 shares of outstanding convertible preferred stock automatically converted into 11,172,955 shares of common stock.

Business Overview

Our pipeline is built on the differentiated therapeutic potential of our lead product candidate, tovinontrine (IMR-687), which is an oral, highly selective, potent small molecule inhibitor of phosphodiesterase-9, or PDE9.

Tovinontrine is currently in Phase 2b clinical development for the treatment of sickle cell disease, or SCD, and β-thalassemia and we expect to begin clinical development of tovinontrine in heart failure with preserved ejection fraction, or HFpEF, in the second quarter of 2022.

We are also advancing IMR-261, an oral activator of nuclear factor erythroid 2–related factor 2, or Nrf2.

Tovinontrine (IMR-687 )

Our lead candidate, tovinontrine, is a highly selective and potent small molecule inhibitor of PDE9.

We are currently conducting the Ardent Phase 2b clinical trial of tovinontrine, a randomized, double-blind, placebo-controlled trial in approximately 115 adult patients with SCD.

We have completed enrollment in the Ardent clinical trial and expect to report interim data from this trial in the first week of April 2022 and final data in the second half of 2022.

In November 2021, we made the decision to change the primary endpoint of the Ardent trial to annualized rate of vaso-occlusive crises, or VOCs , following a written recommendation from the FDA.

Fetal hemoglobin, or HbF, response, which was previously the primary endpoint, will continue to be evaluated as a key secondary endpoint.

The Ardent trial follows completion of our Phase 2a clinical trial of tovinontrine in SCD, which demonstrated a well-tolerated safety profile for tovinontrine and potential benefits from tovinontrine with respect to VOCs.

Changes in SCD-related biomarkers were variable.

We are also conducting a long-term open label extension, or OLE, clinical trial of tovinontrine, which is comprised of patients who completed our Phase 2a clinical trial of tovinontrine.

Data from the OLE trial presented at the American Society of Hematology (ASH) Annual Meeting in December 2021 demonstrated a well-tolerated safety profile for tovinontrine, potential benefits from tovinontrine with respect to VOCs and improvements in certain SCD-related biomarkers, including HbF and F-cells, through 12 months of treatment on the OLE trial.

In the second quarter of 2022, we expect to initiate a new, long-term OLE trial of tovinontrine for patients who complete the Ardent Phase 2b clinical trial in SCD.

In addition to patients from the Ardent trial, we expect patients from the ongoing Phase 2a OLE trial to roll over into this new OLE trial, resulting in one OLE trial with patients from both the Phase 2a clinical trial and the Ardent Phase 2b clinical trial.

ß-thalassemia Program

We are also conducting the Forte Phase 2b clinical trial of tovinontrine, a randomized, double-blind, placebo-controlled trial in approximately 120 transfusion dependent, or TDT, and non-transfusion dependent, or NTDT, patients with ß-thalassemia.

In November 2021, we presented data from a pre-specified interim analysis from the Forte trial in TDT patients.

The interim analysis data demonstrated a well-tolerated safety profile for tovinontrine and a trend for reduced transfusion burden in the higher dose cohort.

We expect to report additional interim data for TDT and NTDT patients from the Forte trial in the first week of April 2022 and data from the final analysis of the Forte clinical trial in the second half of 2022.

HFpEF Program

In the second quarter of 2022, we expect to dose the first patient in the SP 9 IN Phase 2 clinical trial of tovinontrine in HFpEF.

The SP 9 IN trial will be a randomized, placebo-controlled trial of approximately 170 patients 45 years of age or older with enriched PDE9 expression and persistent symptoms of HFpEF.

The primary endpoint of the trial will be the change in N-terminal pro b-type natriuretic peptide, or NT-proBNP, levels.

We have commenced research activities for IMR-261 (formerly CXA-10), an oral, clinic-ready activator Nrf2 .

In pre-clinical models of SCD, IMR-261 was observed to activate expression of HbF and reduce VOCs.

Furthermore, in a preclinical model of ß-thalassemia, IMR-261 was observed to increase hemoglobin and enhance red blood cell, or RBC, maturation.

We have initiated work on drug product manufacturing for IMR-261 as we explore potential clinical development paths in hemoglobinopathies, iron disorders and potentially other areas.

Prior to its acquisition by Imara, IMR-261 was evaluated by Complexa, Inc.

in Phase 2 clinical trials in focal segmental glomerulosclerosis, or FSGS, and pulmonary arterial hypertension, or PAH, and independent medical literature suggests potential in a broad array of RBC diseases, including disorders of hemoglobin, and iron overload diseases.

Financial Overview

Since our inception in 2016, our operations have focused on organizing and staffing our company, business planning, raising capital, developing our technology, undertaking preclinical studies and clinical trials of tovinontrine and acquiring and commencing preclinical studies for IMR-261.

To date, we have funded our operations primarily through the sale of common stock and the sale of convertible preferred stock.

In February 2020 we effected a 1-for-6.299 reverse stock split of our common stock.

All historical share and per share information shown herein and in our consolidated financial statements and related notes have been retroactively adjusted to give effect to the reverse stock split.

On April 1, 2021, we filed a shelf registration statement on Form S-3, or the Shelf, with the SEC in relation to the registration and potential future issuance of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof in the aggregate amount of up to $200.0 million.

The Shelf was declared effective on April 8, 2021.

We also simultaneously entered into a sales agreement, or the Sales Agreement, with Cantor Fitzgerald & Co, LLC, or Cantor, as sales agent, providing for the offering, issuance and sale by us of up to an aggregate $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf.

As of December 31, 2021, we have issued and sold 231,291 shares of common stock under the Sales Agreement , resulting in net proceeds of $1.4 million after deducting commissions and offering expenses.

On July 16, 2021, we completed a public offering of shares of our common stock and issued and sold 8,333,333 shares of common stock at a public offering price of $6.00 per share, resulting in net proceeds of $46.8 million after deducting underwriting discounts and commissions and estimated offering expenses.

We have incurred significant operating losses since inception.

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As of December 31, 2021, we had an accumulated deficit of approximately $147.5 million.

We expect to continue to incur significant operating losses for the foreseeable future, as we advance IMR-687 and any product candidates we may develop in the future from discovery through preclinical development and clinical trials and seek regulatory approval of our product candidates.

We expect to continue to incur significant operating losses for the foreseeable future, as we advance tovinontrine and any product candidates we may develop in the future from discovery through preclinical development and clinical trials and seek regulatory approval of our product candidates.

We expect to incur significant expenses related to maintaining and expanding our intellectual property portfolio, hiring additional research and development and business personnel and operating as a public company.

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We do not have any products approved for sale.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for IMR-687 or any future product candidate.

In addition, if we obtain regulatory approval for IMR-687 or any future product candidate and to the extent that we engage in

commercialization activities on our own, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for tovinontrine or any future product candidate.

In addition, if we obtain regulatory approval for tovinontrine or any future product candidate and to the extent that we engage in commercialization activities on our own, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.

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If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of December 31, 2019 and December 31, 2020, we had $28.9 million and $88.2 million, respectively, in cash, cash equivalents and investments.

We believe that our existing cash, cash equivalents and investments will enable us to fund our operating expenses and capital expenditure requirements into mid-2022.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect .

As of December 31, 2021 we had $90.3 million in cash, cash equivalents and investments.

We believe that though our cash, cash equivalents and investments as of December 31, 2021 will enable us to fund our operating expenses and capital expenditure requirements substantially through the first quarter of 2023, there is substantial doubt about our ability to continue as a going concern within one year after the issuance date of the consolidated financial statements .

See “—Liquidity and Capital Resources.”

Impact of COVID-19 Pandemic

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19.

In December 2019, a novel strain of coronavirus, called COVID-19, emerged and has now spread globally .

The COVID-19 pandemic is ongoing and its impact continues to evolve as of the date of this Annual Report on Form 10-K.

We are actively monitoring the impact of the COVID-19 pandemic on our financial condition, liquidity, operations, suppliers, industry and workforce .

Although we have not experienced any significant adverse impact from the COVID-19 pandemic on our financial condition, results of operations or liquidity as of the date of this Annual Report on Form 10-K, the COVID-19 pandemic has resulted in disruptions to our clinical trial operations, including some missed and incomplete patient visits in our recently completed Phase 2a clinical trial of IMR-687 in SCD as well as site activation and enrollment delays and delays in review of our regulatory submissions with respect to our Phase 2b clinical trials of IMR-687 in SCD and ß-thalassemia.

In addition, most of our employees are currently working remotely, and we are temporarily restricting travel and attendance at industry events by our employees.

The COVID-19 pandemic has also resulted in significant financial market volatility.

A continuation of the volatility could have an adverse effect on our ability to access capital, on our business, results of operations and financial condition and on the market price of our common stock.

We continue to actively monitor the impact of the COVID-19 pandemic on our financial condition, liquidity, operations, suppliers, industry and workforce.

Although we have not experienced any significant adverse impact from the COVID-19 pandemic on our financial condition, results of operations or liquidity as of the date of this Annual Report on Form 10-K, the COVID-19 pandemic has resulted in disruptions to our clinical trial operations, including some missed and incomplete patient visits in our completed Phase 2a clinical trial of tovinontrine in SCD, delays to some patient visits in our OLE clinical trial in SCD, as well as site activation and enrollment delays and delays in review of our regulatory submissions with respect to our Ardent and Forte clinical trials of tovinontrine in SCD and ß-thalassemia.

More recently, we have also experienced some disruptions with the supply chain of third-party vendors who assist us in the conduct of our clinical trials.

In addition, many of our employees are currently working remotely.

Our financial condition, results of operations and liquidity could be negatively impacted by the COVID-19 pandemic in future periods.

The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which remain uncertain and cannot be predicted, including new information that may emerge concerning the continued severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

As the COVID-19 pandemic continues, it may have an adverse effect on our results of future operations, financial position and liquidity, and even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future .

The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which remain uncertain and cannot be predicted, including new information that may emerge concerning the continued severity of COVID-19 and variants of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

As the COVID-19 pandemic continues, it may have an adverse effect on our results of future operations, financial position and liquidity, and on our ability to access capital.

Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.

Lundbeck License Agreement

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The agreement grants us an exclusive license under the licensed technology, including the right to grant sublicenses with certain restrictions, to research, develop, make, have made, use, sell, have sold, offer to sell, import, export and commercialize any product comprising or containing certain PDE9 inhibitors, in the field.

improvements, modifications or derivatives to licensed products, until but not beyond a specified pre-commercialization developmental stage with respect to each such enhancement, improvement, modification or derivative.

Under the agreement, we have made cash payments totaling $1.8 million to date, consisting of an upfront payment and ongoing milestone payments, and also issued shares of our common stock as described in “ Note 1 4 – Related Party Transactions” of the notes to our consolidated financial statements in this Annual Report on Form 10-K .

The agreement also grants us a non-exclusive license under the licensed technology to research and develop, and make, have made, use, import and export for purposes of enabling such research and development, enhancements, improvements, modifications or derivatives to licensed products, until but not beyond a specified pre-commercialization developmental stage with respect to each such enhancement, improvement, modification or derivative.

Under the agreement, we have made cash payments totaling $1.8 million to date, consisting of an upfront payment and ongoing milestone

payments, and also issued shares of our common stock as described in Note 14 of the notes to our consolidated financial statements in this Annual Report on Form 10-K.

We are obligated to make milestone payments to Lundbeck aggregating up to $23.5 million upon the achievement of specified clinical, regulatory and first commercial sale milestones by any licensed product and $11.8 million upon the achievement of specified clinical, regulatory and first commercial sale milestones by any IMARA product that is or comprises a PDE9 inhibitor but is not a licensed product, or a PDE9 product, if any.

We are obligated to pay tiered royalties of low-to-mid single-digit percentages to Lundbeck based on our, and any of our affiliates’ and sublicensees’, net sales of licensed products, and tiered royalties of low single-digit percentages to Lundbeck based on our, and any of our affiliates’ and sublicensees’, net sales of PDE9 products, if any.

See “Business – Exclusive License Agreement” for a further description of the license agreement with Lundbeck .

See “Business—License and Acquisition Agreements” for a further description of the license agreement with Lundbeck .

Financial Operations Overview

We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all.

If our development efforts for IMR-687 or additional product candidates that we may develop in the future are successful and result in marketing approval or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from such collaboration or license agreements.

If our development efforts for tovinontrine or additional product candidates that we may develop in the future are successful and result in marketing approval or if we enter into collaboration or license agreements with third parties, we may generate revenue in the future from a combination of product sales or payments from such collaboration or license agreements.

Operating Expenses

Research and Development.

Research and development expenses consist primarily of costs incurred in connection with the preclinical and clinical development and manufacture of IMR-687, and include:

Research and development expenses consist primarily of costs incurred in connection with the preclinical and clinical development and manufacture of tovinontrine, and include:

potential costs related to the impact of the COVID-19 pandemic;

personnel-related expenses, including salaries, benefits and stock-based compensation expenses, for individuals involved in research and development activities;

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Our internal research and development costs are primarily personnel-related costs and other indirect costs.

Our research and development expenses to-date have been incurred in connection with our development of IMR-687 in SCD and β-thalassemia.

Our research and development expenses to-date have primarily been incurred in connection with our development of tovinontrine in SCD and β-thalassemia.

We do not intend to track our internal research and development expenses on a program-by-program basis as our personnel are deployed across multiple projects under development.

Research and development activities are central to our business model.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to

the increased size and duration of later-stage clinical trials.

We expect research and development costs to increase significantly for the foreseeable future as we continue the development of IMR-687 and any product candidates we may develop in the future.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We expect research and development costs to increase significantly for the foreseeable future as we continue the development of tovinontrine and any product candidates we may

develop in the future.

However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization.

There are numerous factors associated with the successful commercialization of IMR-687 and any product candidates we may develop in the future, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.

There are numerous factors associated with the successful commercialization of tovinontrine and any product candidates we may develop in the future, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.

Additionally, future commercial and regulatory factors beyond our control will impact our clinical development program and plans.

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(in thousands)

Tovinontrine (IMR-687)

Personnel expenses (including stock-based compensation)

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Total research and development expenses

The successful development of IMR-687 and any product candidates we may develop in the future is highly uncertain.

Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of IMR-687 or any future product candidates.

We are also unable to predict when, if ever, material net cash inflows will commence from the sale of IMR-687 or potential future product candidates, if approved.

The successful development of tovinontrine and any product candidates we may develop in the future is highly uncertain.

We are also unable to predict when, if ever, material net cash inflows will commence from the sale of tovinontrine or potential future product candidates, if approved.

This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:

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maintaining a continued acceptable safety profile of the product candidates following approval.

Any changes in the outcome of any of these variables with respect to the development of IMR-687 or any future product candidates could mean a significant change in the costs and timing associated with the development of these product candidates.

Any changes in the outcome of any of these variables with respect to the development of tovinontrine or any future product candidates could mean a significant change in the costs and timing associated with the development of these product candidates.

For example, if the FDA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time to complete clinical development of that product candidate.

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General and Administrative.

General and administrative expenses consist primarily of personnel-related expenses, including salaries, benefits, and stock-based compensation expenses for personnel in executive, finance, accounting, human resources and other administrative functions.

resources and other administrative functions.

Other significant general and administrative expenses include legal fees relating to patent, intellectual property and corporate matters, and fees paid for accounting, consulting and other professional services.

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These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, among other expenses.

We also anticipate increased expenses associated with being a public company, including costs for audit, legal, regulatory, and tax-related services related to compliance with the rules and regulations of the Securities and Exchange Commission, or SEC, listing standards applicable to companies listed on a national securities exchange, director and officer insurance premiums and investor relations costs.

In addition, if we obtain regulatory approval for IMR-687 or any future product candidate and to the extent that we engage in commercialization activities on our own, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities .

In addition, if we obtain regulatory approval for tovinontrine or any future product candidate and to the extent that we engage in commercialization activities on our own, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities .

Total Other Income, Net

Total Other Income, Net.

Total other income, net primarily consists of interest earned on our cash, cash equivalents and investments, offset by amortization and accretion on investments and foreign currency translation adjustments .

Total other income, net primarily consists of interest earned on our cash, cash equivalents and investments .

Results of Operations

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The increase in research and development expenses was primarily attributable to the following:

a $11.3 million increase in costs related to the development and manufacturing of clinical materials, clinical research and oversight of our clinical trials and investigative fees for IMR-687;

a $3.3 million increase in costs related to the development and manufacturing of clinical materials, clinical research and oversight of our clinical trials and investigative fees for tovinontrine;

a $2.2 million increase in personnel-related costs, including a $0.7 million increase in stock-based compensation expense, primarily due to an increase in headcount to support the growth of our research and development efforts;

a $0.6 million decrease in other research and development operational costs, including facilities, supplies, and travel.

a $0.7 million increase in other research and development operational costs, including professional services, supplies, and travel.

General and Administrative Expenses

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The increase in general and administrative expenses was primarily attributable to the following:

a $2.3 million increase in other general and administrative operational costs, including facilities, rent and increased insurance costs as a result of operating as a public company;

a $1.7 million increase in personnel costs, including a $0.9 million increase in stock-based compensation expense, primarily due to an increase headcount;

a $0.4 million increase in legal and professional costs.

a $2.1 million increase in personnel-related costs, including a $1.0 million increase in stock-based compensation expense, primarily due to an increase headcount;

a $1.1 million increase in cost associated with directors and officers’ insurance premiums due to market conditions and a full year of coverage in 2021;

a $0.6 million increase in other general and administrative operational costs, including public relations and corporate taxes;

a $0.3 million decrease in consulting and professional fees, including legal and accounting fees, due to the hiring of additional full-time employees.

Total Other Income, Net

Total other income, net was $0.7 million for the year ended December 31, 2019, compared to total other income, net of $0.3 million for the year ended December 31, 2020.

In June 2019, we invested our cash in money market funds and available-for-sale securities and in each of the years ended December 31, 2019 and December 31, 2020, our total other income, net consisted primarily of interest earned on our cash, cash equivalents and investments .

Total other income, net was $0.3 million for the year ended December 31, 2020, compared to total other income, net of $0.1 million for the year ended December 31, 2021, in each case consisting primarily of interest earned on our cash, cash equivalents and investments.

Liquidity and Capital Resources

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Since our inception, we have incurred significant losses in each period and on an aggregate basis.

We have not yet commercialized IMR-687, which is in clinical development, and we do not expect to generate revenue from sales of IMR-687 or any product candidates we may develop in the future for several years, if at all.

Through December 31, 2020, we have funded our operations primarily through the sale of common stock in our IPO and sale of convertible preferred stock.

On February 25, 2020, we raised $17.1 million in gross proceeds from the issuance of 1,562,994 shares of Series B Preferred Stock upon a waiver of specified milestone conditions from the holders of a majority of the shares then held by the holders of Series B Preferred Stock.

On March 16, 2020, we completed an IPO of our common stock and issued and sold 4,700,000 shares of common stock at a public offering price of $16.00 per share, resulting in gross proceeds of $75.2 million.

On April 13, 2020, the underwriters exercised their option in full to purchase 705,000 additional shares of common stock for aggregate gross proceeds of $11.3 million.

We have not yet commercialized tovinontrine, which is in clinical development, and we do not expect to generate revenue from sales of tovinontrine or any product candidates we may develop in the future for several years, if at all.

Through December 31, 2021, we have funded our operations primarily through the issuance of common stock and convertible preferred stock.

In February 2020, we raised $17.1 million in gross proceeds from the sale of 1,562,994 shares of Series B preferred stock upon a waiver of specified milestone conditions from the holders of a majority of the shares then held by the holders of Series B preferred stock.

In April 2020, the underwriters exercised their option in full to purchase 705,000 additional shares of common stock for aggregate gross proceeds of $11.3 million.

As of December 31, 2019 and December 31, 2020, we had $28.9 million and $88.2 million, respectively, in cash, cash equivalents and investments.

On April 1, 2021, we filed the Shelf with the SEC in relation to the registration and potential future issuance of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof in the aggregate amount of up to $200.0 million.

The Shelf was declared effective on April 8, 2021.We also simultaneously entered into the Sales Agreement with Cantor, as sales agent, providing for the offering, issuance and sale by us of up to an aggregate $75.0 million of our common stock from time to time in “at-the-market” offerings under the Shelf.

As of December 31, 2021, we have issued and sold 231,291 shares of common stock under the Sales Agreement, resulting in net proceeds of $1.4 million after deducting commissions and offering expenses.

The extent to which we utilize the Sales Agreement as a source of funding will depend on a number of factors, including the prevailing market price of our common stock, general market conditions, the extent to which we are able to secure funds from other sources, and restrictions on our ability to sell common stock pursuant to the Sales Agreement to the extent we are then subject to restrictions on our ability to utilize the Form S-3 shelf registration statement to sell more than one-third of the market value of our public float, meaning the aggregate market value of voting and non-voting common stock held by non-affiliates, in any trailing 12-month period.

Accordingly, we may not be able to sell shares under the Sales Agreement at prices or amounts that we deem acceptable, and there can be no assurance that we will sell any further common stock pursuant to the Sales Agreement.

As of December 31, 2021, we had $90.3 million in cash, cash equivalents and investments.

Based on our recurring losses and negative cash flows from operations since inception, expectation of continuing operating losses and negative cash flows from operations for the foreseeable future, and the need to raise additional capital to finance our future operations, we have concluded that there is substantial doubt about our ability to continue as a going concern for at least twelve months from the date of filing this Annual Report on Form 10-K.

See Note 1 of the notes to our annual consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a further discussion of our liquidity and the conditions and events that raise substantial doubt regarding our ability to continue as a going concern.

While we do not currently expect that the COVID-19 pandemic will have a material adverse impact on our short-term or long-term liquidity, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity.

For additional information see “ — Impact of COVID-19 Pandemic .”

See “ — Impact of COVID-19 Pandemic.”

The following table provides information regarding our cash flows for the periods indicated:

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Net Cash Used in Operating Activities

Net cash used in operating activities for the year ended December 31, 2020 was $37.4 million primarily due to our net loss of $41.4 million, partially offset by stock-based compensation expense of $2.2 million, depreciation expense of $0.1 million, amortization of $0.1 million on our short-term investments, and net cash inflows from the change in working capital of $1.7 million.

Net cash used in operating activities for the year ended December 31, 2019 was $21.9 million primarily due to our net loss of $23.5 million, partially offset by stock-based compensation expense of $0.9 million and net cash inflows from the change in working capital of $0.7 million.

Net cash used in operating activities for the year ended December 31, 2021 was $46.8 million primarily due to our net loss of $51.4 million, partially offset by stock-based compensation expense of $3.8 million, depreciation expense of $0.1 million, amortization of $0.2 million on our short-term investments, and net cash inflows from the change in operating assets and liabilities of $0.5 million.

Net Cash Used in Investing Activities

Net cash used in investing activities for the year ended December 31, 2021 was $1.6 million primarily due to purchases of marketable securities of $47.6 million, partially offset by proceeds from sales and maturities of short-term investments of $45.9 million.

Net cash used in investing activities for the year ended December 31, 2019 was $24.1 million for purchases of property and equipment related to our operating lease, under which we commenced occupancy in August 2019, and for purchases of short-term investments.

Net cash used in investing activities for the year ended December 31, 2020 was $16.7 million primarily due to purchases of marketable securities of $64.2 million, partially offset by proceeds from sales and maturities of short-term investments of $47.5 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the year ended December 31, 2021 was $49.1 million, primarily due to $46.8 million of net proceeds after deducting underwriting discounts and commissions and payment of issuance costs from our July 2021 offering, $1.4 million of net proceeds after deducting underwriting discounts and commissions and payment of issuance costs from the sale of common stock under the Sales Agreement with Cantor, and $0.9 million of proceeds received from the exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2020 was $96.9 million, primarily due to $80.4 million of net proceeds received from our IPO, after deducting underwriting discounts and commissions, $17.1 million of cash inflow resulting from sale of Series B Preferred Stock in February 2020, and $1.0 million of proceeds from stock option exercises.

The proceeds from our IPO were partially offset by payments of $1.7 million of issuance costs.

Net cash provided by financing activities for the year ended December 31, 2019 was $43.6 million, primarily due to $45.6 million of cash inflow resulting from the issuance of our Series B Preferred Stock in March and May of 2019, which was partially offset by payments of $2.0 million in deferred offering costs.

Funding Requirements

We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we continue research and development, initiate clinical trials, and seek marketing approval for IMR-687 and any of our future product candidates.

In addition, we expect to incur additional costs associated with operating as a public company.

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navigate the impacts of COVID-19 and our response to it;

continue to advance clinical development of IMR-687, including our OLE clinical trial in patients with SCD and our ongoing Phase 2b clinical trials of IMR-687 in patients with SCD and β-thalassemia;

expand our planned research and development efforts for IMR-687 and potentially pursue clinical activities for IMR-687 in HFpEF;

continue to incur third-party manufacturing costs to support our clinical trials of IMR-687 and, if approved, commercialization;

seek regulatory and marketing approvals for IMR-687;

establish a sales, marketing and distribution infrastructure to commercialize IMR-687, if approved;

commence development activities for any additional product candidates we may identify;

continue to advance clinical development of tovinontrine, including our ongoing Ardent and Forte Phase 2b clinical trials of tovinontrine in patients with SCD and β-thalassemia and our OLE clinical trial in patients with SCD ;

expand our planned research and development efforts for tovinontrine and pursue clinical activities for tovinontrine in HFpEF ;

continue to incur third-party manufacturing costs to support our clinical trials of tovinontrine and any other product candidates we may develop and, if approved, commercialization of such product candidates ;

seek regulatory and marketing approvals for tovinontrine and any other product candidates we may develop;

establish a sales, marketing and distribution infrastructure to commercialize t ovinontrine and any other product candidates we may develop, in each case if approved ;

commence development activities for any additional product candidates we may identify, including IMR-681;

acquire or in-license products, product candidates, technologies and/or data referencing rights;

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make any milestone payments to Lundbeck under our exclusive license agreement with Lundbeck, upon the achievement of specified clinical or regulatory milestones .

Based on our current operating plan, we expect that our existing cash, cash equivalents and investments will enable us to fund our operating expenses and capital expenditure requirements into mid-2022.

We have concluded that there is substantial doubt about our ability to continue as a going concern for at least twelve months from the date of filing this Annual Report on Form 10-K.

However, we have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.

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the impact of the COVID-19 pandemic and our response to it;

the time and cost necessary to complete our ongoing OLE and Phase 2b clinical trials of IMR-687 in patients with SCD, to initiate and complete one or more pivotal clinical trials of IMR-687 in SCD, and to pursue regulatory approvals for IMR-687 in SCD, and the costs of post-marketing studies that could be required by regulatory authorities;

the time and cost necessary to complete our Phase 2b clinical trial of IMR-687 in patients with β-thalassemia, to initiate and complete one or more pivotal clinical trials of IMR-687 in β-thalassemia, and to pursue regulatory approvals for IMR-687 in β-thalassemia, and the costs of post-marketing studies that could be required by regulatory authorities;

our ability to advance IMR-687 in HFpEF into and through clinical development, and the timing and scope of these development activities;

the costs of obtaining clinical and commercial supplies of IMR-687 and any other product candidates we may identify and develop;

our ability to successfully commercialize IMR-687 and any other product candidates we may identify and develop;

the manufacturing, selling and marketing costs associated with IMR-687 and any other product candidates we may identify and develop, including the cost and timing of establishing our sales and marketing capabilities;

the amount and timing of sales and other revenues from IMR-687 and any other product candidates we may identify and develop, including the sales price and the availability of coverage and adequate third-party reimbursement;

the time and cost necessary to complete our ongoing Ardent and OLE clinical trials of tovinontrine in patients with SCD, to initiate and complete one or more pivotal clinical trials of tovinontrine in SCD, and to pursue regulatory approvals for tovinontrine in SCD, and the costs of post-marketing studies that could be required by regulatory authorities ;

the time and cost necessary to complete our Forte clinical trial of tovinontrine in patients with β-thalassemia, to initiate and complete one or more pivotal clinical trials of tovinontrine in β-thalassemia, and to pursue regulatory approvals for tovinontrine in β-thalassemia, and the costs of post-marketing studies that could be required by regulatory authorities ;

our ability to advance tovinontrine in HFpEF into and through clinical development, and the timing and scope of these development activities ;

the costs of obtaining clinical and commercial supplies of tovinontrine and any other product candidates we may identify and develop;

our ability to successfully commercialize tovinontrine and any other product candidates we may identify and develop;

the manufacturing, selling and marketing costs associated with tovinontrine and any other product candidates we may identify and develop, including the cost and timing of establishing our sales and marketing capabilities;

the amount and timing of sales and other revenues from tovinontrine and any other product candidates we may identify and develop, including the sales price and the availability of coverage and adequate third-party reimbursement;

the time and cost necessary to respond to technological and market developments;

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the costs of maintaining, expanding and protecting our intellectual property portfolio.

A change in the outcome of any of these or other variables with respect to the development of IMR-687 or any product candidate we may develop in the future could significantly change the costs and timing associated with the development of that product candidate.

A change in the outcome of any of these or other variables with respect to the development of tovinontrine or any product candidate we may develop in the future could significantly change the costs and timing associated with the development of that product candidate.

Further, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

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We currently have no credit facility or committed sources of capital.

Based on our available cash resources, there is substantial doubt about our ability to continue as a going concern within one year after the date of filing this Annual Report on Form 10-K, and we expect that we will need to raise additional capital in the near term.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our existing stockholders may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of such stockholders.

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If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research program or product candidates, or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt

financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves .

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves .

Contractual Obligations

In the normal course of business , we enter into agreements that contain contractual obligations, of which the most significant to date include our facility lease and our licensing agreement with Lundbeck.

In May 2019, we entered into a lease agreement for 4,210 square feet of office space located in Boston, Massachusetts.

In June 2021, we entered into an amendment to the lease agreement pursuant to which we will lease an additional 5,026 square feet of office space, brining our total leased space to 9,236 square feet.

We expect the lease for this additional space to commence by the end of March 2022.

As of commencement of the additional lease space, the remaining required payments for our operating lease, not including the optional extension period, will be approximately $3.2 million.

For further information regarding our operating lease agreement, please see Note 8 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Our license agreement with Lundbeck, as well as certain other agreements, requires us to pay third parties upon achievement of certain development, regulatory or commercial milestones.

Amounts related to contingent payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory and commercial milestones that may not be achieved.

We have not included payments contingent upon the achievement of certain development, regulatory or commercial milestones on our consolidated balance sheets.

For further information regarding certain of our license agreements and amounts that could become payable in the future under those agreements, please see Note 7 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

In addition, we are party to certain agreements with contract research organizations for clinical trials and clinical supply manufacturing and with vendors for preclinical research studies and other services and products for operating purposes.

Such contracts are generally cancellable

by us for convenience with a specified amount of notice.

We may be subject to certain termination fees or wind-down costs upon termination of these agreements.

The exact amount of such costs are generally not fixed or estimable.

Critical Accounting Policies and Estimates

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generally accepted accounting principles.

The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reported periods.

The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities, the

disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reported periods.

We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances.

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We determine the fair value of stock-based awards based on the fair value of our common stock on the date of grant.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield.

term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield.

Given our limited trading history as a public company, we determine the volatility for awards granted based on an analysis of reported data for a group of guideline companies that issued options with substantially similar terms.

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Prior to our IPO, the expected term of our stock options granted to non-employees also used the “simplified” method.

Following our IPO, the expected term of options granted to non-employees is determined by contractual term.

Following our IPO, the expected term of options granted to non-employee s is determined by contractual term.

The risk-free interest rate is determined by reference to the U.S.

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therefore, the expected dividend yield is assumed to be zero .

As there was no public market for our common stock prior to our IPO, the estimated fair value of our common stock for awards made prior to the IPO was approved by our board of directors, with input from management, as of the date of each award grant, considering our most recently available independent third-party valuations of common stock and utilizing the valuation of our company’s enterprise value determined utilizing various methods including the back-solve method, OPM, or a hybrid of the probability-weighted expected return method, or PWERM, and the OPM.

As there was no public market for our common stock prior to our IPO, the estimated fair value of our common stock for awards made prior to the IPO was approved by our board of directors, with input from management, as of the date of each award grant, considering our most recently available independent third-party valuations of common stock and utilizing the valuation of our company’s enterprise value determined utilizing various methods including the back-solve method, option pricing model, or OPM, or a hybrid of the probability-weighted expected return method, or PWERM, and the OPM.

The total enterprise value was then allocated to the various outstanding equity instruments, including the underlying common stock, utilizing the option-pricing model.

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We will remain an EGC until the earliest of (i) December 31, 2025, (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous rolling three-year period, or (iv) the date on which we are deemed to be a large accelerated filer under the Securities Exchange Act of 1934, as amended.

Off-balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis