What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-06 compared with 2021-11-09 · 120 added, 178 removed, 138 unchanged (68% of the section changed)

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Business Overview

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, and other serious diseases.

Our lead product candidate, t ovinontrine (IMR-687), is an oral, potentially disease-modifying treatment that is currently in clinical development for that treatment of patients with sickle cell disease, or SCD, and ß-thalassemia.

A summary of our pipeline of product candidates is set forth below:

Tovinontrine (IMR-687)

Tovinontrine is a highly selective, potent small molecule inhibitor of phosphodiesterase-9, or PDE9.

Sickle Cell Disease

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

We have completed enrollment in the Ardent clinical trial and expect to report interim data in the fourth quarter of 2021, data from the primary analysis in the first quarter of 2022 and data from the final analysis in the second half of 2022.

We are also conducting an open label extension, or OLE, clinical trial of tovinontrine in patients with SCD.

The OLE clinical trial allows patients from our completed Phase 2a clinical trial of tovinontrine in SCD to continue into a long-term four-year trial to test safety and measure tolerability of tovinontrine.

We expect to present 12-month data from the OLE clinical trial at the American Society of Hematology, or ASH, Annual Meeting in December 2021.

At the 2021 European Hematology Association, or EHA, Annual Congress in June 2021, we presented final data from our completed Phase 2a clinical trial in SCD as well as incremental data from the OLE clinical trial in SCD.

The data from these trials showed a well-tolerated safety profile for tovinontrine and potential benefits from tovinontrine with respect to vaso-occlusive crises, or VOCs.

Changes in SCD-related biomarkers were variable and included directional increases in fetal hemoglobin, or HbF.

ß-thalassemia

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

We have completed enrollment in the transfusion dependent arm of the Forte clinical trial and enrollment in the non-transfusion dependent arm is ongoing.

We expect to report interim data for transfusion dependent patients in the fourth quarter of 2021 , data from a key efficacy analysis of the Forte clinical trial for transfusion dependent patients in the first quarter of 2022 and data from the final analysis of the Forte clinical trial in the second half of 2022.

We expect to report preliminary data from the non-transfusion dependent arm of the Forte trial in the first half of 2022.

Heart Failure with Preserved Ejection Fraction

We are advancing development of tovinontrine to target additional indications, including heart failure with preserved ejection fraction, or HFpEF, for which we completed preclinical research in the first half of 2021.

In three distinct mouse models of HFpEF, compared with control mice, tovinontrine was shown to reduce the median size of cardiomyocytes and lower plasma B-type and atrial natriuretic peptide levels.

Moreover, markers of renal dysfunction, including blood urea nitrogen and urine albumin-to-creatinine ratio, were lower in mice treated with tovinontrine compared with vehicle treated mice in all models.

Additionally, tovinontrine did not

significantly change heart rate or blood pressure .

We expect to report preclinical data on tovinontrine in HFpEF at the American Heart Association’s Scientific Sessions 2021 in November 2021.

We are engaging with the United States Food and Drug Administration with respect to our clinical development plan for tovinontrine in HFpEF and expect to begin a Phase 2 clinical trial of tovinontrine in HFpEF in 2022.

We have commenced research activities for IMR-261 (formerly CXA-10), an activator of nuclear factor erythroid 2–related factor 2, or Nrf2.

In pre-clinical models of SCD, IMR-261 was observed to reactivate fetal hemoglobin and reduce VOCs.

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

We expect to present results from our preliminary preclinical studies of IMR-261 in SCD and ß-thalassemia at the ASH Annual Meeting in December 2021.

We have initiated work on drug product manufacturing for IMR-261 as we explore potential clinical development paths.

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 promise in a broad array of red blood cell diseases, including disorders of hemoglobin.

We are a biopharmaceutical company that has been dedicated to developing and commercializing novel therapeutics to treat patients suffering from serious diseases.

In April 2022, we announced the results from interim analyses of our Ardent Phase 2b clinical trial of tovinontrine (IMR-687) in patients with sickle cell disease, or SCD, and Forte Phase 2b clinical trial of tovinontrine in patients with ß-thalassemia.

Based on the data generated by these interim analyses, we decided to discontinue the Ardent and Forte trials as well as the further development of tovinontrine in SCD and ß-thalassemia.

We also decided to discontinue development of tovinontrine in heart failure with preserved ejection fraction, as well as our development plans with respect to IMR-261.

In connection with these events, our Board of Directors approved a reduction in workforce designed to substantially reduce our operating expenses while we undertake a comprehensive assessment of our strategic options to maximize stockholder value.

Ardent Phase 2b Sickle Cell Disease Interim Analysis

The interim analysis for the Ardent trial was conducted when all participants completed the week 24 assessment or terminated early.

The intent-to-treat population was used for the primary efficacy analysis, which is a comparison of the median annualized vaso-occlusive crisis, or VOC, rate between the high dose tovinontrine group (n=47, once daily oral dose of 300 mg or 400 mg based on patient weight) and placebo group (n=32).

Safety was analyzed across all participants enrolled in the Ardent trial, including the high dose, low dose (n=33, 200 mg or 300 mg once daily oral dose based on patient weight) and placebo groups.

Data from the interim analysis demonstrated that tovinontrine was generally well-tolerated, with the most frequent adverse events (at least 10% of participants in any treatment group) considered at least possibly related to study drug by the investigator being nausea, headache, dizziness and vomiting.

Four (3.6%) participants discontinued prior to week 24 due to adverse events.

The median annualized VOC rate in the placebo group was 2.02 VOCs per year and was 1.89 VOCs per year in the high dose tovinontrine group, for a treatment difference of 0.13 VOCs per year, or 6.4%.

Based on the minimal decrease observed in VOCs with the high dose and low VOC rate in the placebo arm, we enacted an addendum to the statistical analysis plan for the trial and noted trends of VOC benefit with tovinontrine.

The median annualized rate of VOCs in the low dose tovinontrine group was zero, as compared to 2.02 in the placebo group, and as compared to placebo, the low dose tovinontrine group experienced an increase in median time to first VOC and a higher proportion of participants who were VOC-free.

A trend for lower median annualized rate of VOCs was also observed for participants in the high and low dose tovinontrine groups on monotherapy (not on background hydroxyurea) as compared to placebo.

Although these additional data were encouraging, none were statistically significant.

In addition, no meaningful difference was observed in fetal hemoglobin response in either the high or low dose tovinontrine groups as compared to placebo.

Collectively, the overall additional data did not materially increase the likelihood of success for this trial.

Forte Phase 2b Beta-thalassemia Interim Analysis

The Forte trial interim analysis evaluated safety and biomarker data for both transfusion-dependent thalassemia, or TDT, and non-transfusion-dependent thalassemia, or NTDT, cohorts, as well as data on transfusion burden reduction in the TDT cohort.

In both cohorts, tovinontrine was well-tolerated, with the most frequent adverse events (at least 10% of participants in any treatment group) considered at least possibly related to study drug by the investigator being nausea and headache.

One NTDT and eight TDT participants (3.3% and 10.8%, respectively) discontinued study drug due to adverse events.

Participants in the TDT cohort of the Forte trial were randomized to either placebo (n=20), low dose (n=25, 200 mg or 300 mg) or high dose (n=29, 300 mg or 400 mg).

No meaningful benefit was observed in transfusion burden in either tovinontrine group when compared to placebo.

Participants in the NTDT cohort of the Forte trial were randomized to either placebo (n=7), low-dose group (n=8, 200 mg or 300 mg), or high-dose group (n=14, 300 mg or 400 mg).

No meaningful improvements were observed in most disease-related biomarkers, including total hemoglobin.

Financial Overview

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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 unaudited condensed 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.

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We also simultaneously entered into a sales agreement, or 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 September 30, 2021, we have issued and sold 231,291 shares of common stock under the Sales Agreement , resulting in net proceeds of $1.5 million after deducting commissions and offering expenses.

As of March 31, 2022, 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.

Our losses from operations were $13.7 million and $37.1 million for the three and nine months ended September 30, 2021, respectively, and $12.5 million and $30.1 million for the three and nine months ended September 30, 2020, respectively.

As of September 30, 2021, we had an accumulated deficit of approximately $133.2 million.

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.

In addition, our losses from operations may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

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 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.

Our losses from operations were $14.7 million and $10.3 million for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, we had an accumulated deficit of approximately $162.1 million.

In April 2022, we discontinued development of tovinontrine and implemented reduction in workforce, each of which was designed to substantially reduce our operating expenses while we undertake a comprehensive assessment of our strategic options.

Notwithstanding these events, w e expect to continue to incur operating losses for the foreseeable future.

In addition, our losses from operations may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the outcome of our strategic process and depending on whether we decide to pursue any future product development efforts.

We are not currently developing any product candidates and we do not have any products approved for sale.

If we decide to pursue any future product development efforts, we will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for any future product candidate.

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

If we decide to pursue any future product development efforts, we will need substantial additional funding to support our continuing operations and develop a growth strategy.

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

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We will need to generate significant revenue to achieve profitability, and we may never do so.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.

Even if we are able to generate product sales, we may not become profitable.

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 September 30, 2021 we had $102.8 million in cash, cash equivalents and investments.

We believe that our cash, cash equivalents and investments as of September 30, 2021 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2023 .

As of March 31, 2022 we had $72.9 million in cash, cash equivalents and investments.

We believe that our cash, cash equivalents and investments as of March 31, 2022 will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the date of filing this Quarterly Report on Form 10-Q.

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.

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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 Quarterly Report on Form 10-Q .

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 Quarterly Report on Form 10-Q, 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.

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

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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, of which we have paid $1.8 million to date, 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, of which we have made no payments to date.

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.

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.

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 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.

If we decide to pursue any future product development efforts and such efforts 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 tovinontrine, and include:

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

Research and development expenses consist primarily of costs incurred in connection with the preclinical and clinical development and manufacture of our products.

We expect our research and development expenses to decrease significantly beginning in the second half of 2022 as a result of our April 2022 decision to discontinue development of tovinontrine and our related reduction in workforce.

For the periods presented in this Quarterly Report on Form 10-Q, research and development expenses include:

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;

external research and development expenses incurred under agreements with contract research organizations, or CROs, investigative sites, and consultants that conduct our preclinical studies and clinical trials and other scientific development services;

costs incurred under agreements with contract manufacturing organizations, or CMOs, for developing and manufacturing material for our preclinical studies and clinical trials;

external research and development expenses incurred under agreements with contract research organizations, or CROs, investigative sites, and consultants that conducted our preclinical studies and clinical trials and other scientific development services;

costs incurred under agreements with contract manufacturing organizations, or CMOs, who develop ed and manufactur ed material for our preclinical studies and clinical trials;

costs related to compliance with regulatory requirements;

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Our research and development expenses to-date have 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 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 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 .

The following table summarizes our research and development expenses for the three and nine months ended September 30, 2021 and 2020:

We did not track our internal research and development expenses on a program-by-program basis as our personnel were deployed across multiple projects under development.

The following table summarizes our research and development expenses for the three months ended March 31, 2022 and 2021:

Three Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands)

Tovinontrine (IMR-687)

Personnel expenses (including stock-based compensation)

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Total research and development expenses

The successful development of tovinontrine 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 tovinontrine or any future product candidates.

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.

If we decide to pursue any future product development efforts, the successful development of any product candidates is highly uncertain.

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

We are also unable to predict when, if ever, material net cash inflows will commence from the sale of 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 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.

We may never obtain regulatory approval for any of our product candidates.

Drug commercialization will take several years and millions of dollars in development costs.

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

If we decide to pursue any future product development efforts, we may never obtain regulatory approval for any product candidates.

Drug commercialization takes several years and millions of dollars in development costs and the potential success of such programs is difficult to predict and are often not successful.

General and Administrative.

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Other significant general and administrative expenses include the cost of director and officer insurance premiums, legal fees relating to patent, intellectual property and corporate matters, and fees paid for accounting, consulting and other professional services.

We anticipate that our general and administrative expenses will increase in the future as our business expands to support our continued research and development activities, including our future clinical programs.

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

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.

We anticipate that our general and administrative expenses will decrease beginning in the second half of 2022 following our April 2022 decision to discontinue development of tovinontrine and the related reduction in workforce.

Our future general and administrative expenses will be significantly dependent on the outcome of our strategic process and on whether we decide to pursue any future product development efforts.

Total Other Income, Net

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Results of Operations

Comparison of the Three Months Ended September 30, 2021 and 2020

The following table summarizes our results of operations for the three months ended September 30, 2021 and 2020:

Comparison of the Three months ended March 31, 2022 and 2021

The following table summarizes our results of operations for the Three months ended March 31, 2022 and 2021:

Three Months Ended

September 30,

(in thousands)

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Research and Development Expenses

Research and development expenses increased by approximately $0.9 million from $9.5 million for the three months ended September 30, 2020, to $10.4 million for the three months ended September 30, 2021.

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

a $0.4 million increase in personnel-related costs, including a $0.2 million increase in stock-based compensation expense, primarily due to an increase headcount;

a $0.3 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;

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

General and Administrative Expenses

General and administrative expenses increased by approximately $0.3 million from $3.0 million for the three months ended September 30, 2020, to $3.3 million for the three months ended September 30, 2021.

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

a $0.4 million increase in personnel-related costs, including a $0.2 million increase in stock-based compensation expense, primarily due to an increase headcount;

a $0.2 million increase in costs associated with directors and officers insurance premiums;

a $0.1 million increase in other general and administrative operational costs, including travel, corporate taxes, and supplies;

a $0.4 million decrease in legal and professional services.

Total Other Income, Net

Total other income, net was less than $0.1 million for the three months ended September 30, 2021 and $0.1 million for the three months ended September 30, 2020, in each case consisting primarily of interest earned on our cash, cash equivalents and investments.

Comparison of the Nine Months Ended September 30, 2021 and 2020

The following table summarizes our results of operations for the nine months ended September 30, 2021 and 2020:

Nine Months Ended

September 30,

(in thousands)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Total other income, net

Research and Development Expenses

Research and development expenses increased by approximately $4.4 million from $23.2 million for the nine months ended September 30, 2020 to $27.6 million for the nine months ended September 30, 2021.

Research and development expenses increased by approximately $4.1 million from $7.1 million for the three months ended March 31, 2021, to $11.2 million for the three months ended March 31, 2022.

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

a $3.5 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 $1.2 million increase in personnel-related costs, including a $0.5 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 $0.4 million increase in personnel-related costs, primarily due to an increase headcount which occurred prior to our April 2022 workforce reduction;

a $0.2 million increase in other research and development operational costs, including professional services, supplies, and travel.

General and Administrative Expenses

General and administrative expenses increased by approximately $2.6 million from $7.0 million for the nine months ended September 30, 2020 to $9.5 million for the nine months ended September 30, 2021.

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

a $1.5 million increase in personnel-related costs, including a $0.8 million increase in stock-based compensation expense, primarily due to an increase headcount;

a $1.0 million increase in cost associated with directors and officers insurance premiums;

a $0.4 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, business development, and accounting fees.

General and administrative expenses increased by approximately $0.3 million from $3.2 million for the three months ended March 31, 2021, to $3.5 million for the three months ended March 31, 2022.

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

a $0.3 million increase in personnel-related costs, including a $0.1 million increase in stock-based compensation expense, primarily due to an increase headcount which occurred prior to our April 2022 workforce reduction;

a $0.1 million increase in other general and administrative operational costs, including facilities and franchise tax;

a $0.1 million decrease in consulting and professional fees, including legal, business development, accounting and audit fees

Total Other Income, Net

Total other income, net was less than $0.1 million for the nine months ended September 30, 2021 and $0.3 million for the nine months ended September 30, 2020, in each case consisting primarily of interest earned on our cash, cash equivalents and investments.

Total other income, net was less than $0.1 million for the three months ended March 31, 2022 and less than $0.1 million for the three months ended March 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 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 September 30, 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 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 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.

We have not yet commercialized or generated revenue from sales of any product candidate.

Through March 31, 2022, we have funded our operations primarily through the issuance of common stock and convertible preferred stock.

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 September 30, 2021, we have issued and sold 231,291 shares of common stock under the Sales Agreement, resulting in net proceeds of $1.5 million after deducting commissions and offering expenses.

As of March 31, 2022, 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 September 30, 2021, we had $102.8 million in cash, cash equivalents and investments.

As of March 31, 2022, we had $72.9 million in cash, cash equivalents and investments.

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.

See “Impact of COVID-19 Pandemic.”

The following table provides information regarding our cash flows for the nine months ended September 30, 2021 and 2020:

Nine Months Ended

September 30,

The following table provides information regarding our cash flows for the three months ended March 31, 2022 and 2021:

Three Months Ended

(in thousands)

Net cash used in operating activities

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Net cash provided by financing activities

Net increase in cash, cash equivalents, and restricted cash

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net Cash Used in Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2021 was $34.3 million primarily due to our net loss of $37.1 million and net cash outflow from a change in working capital of $0.2 million, partially offset by stock-based compensation expense of $2.9 million and depreciation expense of $0.1 million.

Net cash used in operating activities for the nine months ended September 30, 2020 was $29.1 million primarily due to our net loss of $29.8 million and net cash outflow from a change in working capital of $0.9 million, partially offset by stock-based compensation expense of $1.6 million.

Net cash used in operating activities for the three months ended March 31, 2022 was $17.2 million primarily due to our net loss of $14.6 million and net cash outflow from a change in operating assets and liabilities of $3.6 million, partially offset by stock-based compensation expense of $1.0 million.

Net cash used in operating activities for the three months ended March 31, 2021 was $13.0 million, primarily due to our net loss of $10.3 million and net cash outflow from the change in operating assets and liabilities of $3.8 million, partially offset by stock-based compensation expense of $0.9 million and amortization of $0.1 million on our short-term investments.

Net Cash Provided by Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2021 was $12.9 million due to proceeds from maturities of short-term investments of $42.6 million, partially offset by purchases of short-term investments of $29.8 million.

Net cash used in investing activities for the nine months ended September 30, 2020 was $37.9 million due to purchases of marketable securities of $55.8 million and purchases of property and equipment of less than $0.1 million, partially offset by proceeds from sales and maturities of short-term investments of $17.9 million.

Net cash provided by investing activities for the three months ended March 31, 2022 was $5.3 million due to proceeds from maturities of short-term investments of $5.5 million, partially offset by purchases of property and equipment of $0.1 million.

Net cash provided by investing activities for the three months ended March 31, 2021 was $18.3 million due to proceeds from sales and maturities of short-term investments of $22.0 million, partially offset by purchases of marketable securities of $3.7 million.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2021 was $49.1 million, primarily due to $47.0 million of net proceeds after deducting underwriting discounts and commissions from our July 2021 offering, $1.8 million of net proceeds after deducting underwriting discounts and commissions from the sale of common stock under our Sales Agreement with Cantor, and $0.9 million of proceeds received from the exercise of stock options.

The financing cash inflows were partially offset by payment of $0.6 million of issuance costs.

Net cash provided by financing activities for the nine months ended September 30, 2020 was $96.3 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 $0.4 million of proceeds from stock option exercises.

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

We did not incur any financing cash outflow or inflow activities for the three months ended March 31, 2022.

Net cash provided by financing activities for the three months ended March 31, 2021 was $0.5 million, primarily due to $0.5 million of net proceeds received from the exercise of stock options.

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 tovinontrine and any of our future product candidates.

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

Our expenses will also increase if, and as, we:

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

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 tovinontrine and any other product candidates we may develop, in each case if approved;

commence development activities for any additional product candidates we may develop, including IMR-261;

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

maintain, expand, enforce, defend and protect our intellectual property;

hire additional clinical, quality control, manufacturing and other scientific personnel;

add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and our operations as a public company;

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 our existing cash, cash equivalents and investments will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2023.

We expect our operating expenses to decrease significantly beginning in the second half of 2022 following our April 2022 decision to discontinue development of tovinontrine and implement a reduction in workforce.

However, we may not realize, in full or in part, the anticipated benefits and savings in operating expenses from these decisions due to unforeseen difficulties, delays or unexpected costs.

As a result, our future expenses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the outcome of our strategic process and depending on whether we decide to pursue any future product development efforts.

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.

Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.

Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:

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

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 develop;

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

the manufacturing, selling and marketing costs associated with tovinontrine and any other product candidates we may 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 develop, including the sales price and the availability of adequate third-party reimbursement;

If we decide to pursue any future product development efforts, our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:

whether we realize the anticipated cost savings in connection with our April 2022 workforce reduction;

our ability to consummate a strategic transaction and the nature and type of such transaction;

our ability to bring any product candidates through preclinical and clinical development, and the timing and scope of these research and development activities;

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

our ability to successfully commercialize any product candidates we may develop;

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

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

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

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our ability to attract, hire and retain qualified personnel;

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

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 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.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

the costs associated with operating as a public company and maintaining compliance with exchange listing and SEC requirements.

A change in the outcome of any of these or other variables with respect to the development of 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 need for additional funds is heavily dependent on the outcome of our ongoing assessment of strategic options and our ability to consummate a strategic transaction.

Until such time, if ever, as we can generate substantial revenues, we expect to finance our cash needs through a combination of cash-on-hand, equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements.

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

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.

Additional debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

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.

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.

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 any 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 lease an additional 5,026 square feet of office space, brining our total leased space to 9,236 square feet.

The lease for this additional space commenced in February 2022.

As of the commencement of the additional lease space, the remaining required payments for our operating lease, not including the optional extension period is approximately $3.1 million.

For further information regarding our operating lease agreement, please see Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

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 agreement with

Lundbeck and amounts that could become payable in the future under that agreement , please see Note 7 to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q .

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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The effects of material revisions in estimates, if any, will be reflected in the unaudited condensed consolidated financial statements prospectively from the date of change in estimates.

During the three and nine months ended September 30, 2021, there were no material changes to our critical accounting policies from those described in our audited consolidated financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on March 5, 2021, with the exception of the modified retrospective adoption of ASC 842 Leases.

For more information on the adoption of ASC 842 Leases, see Note 2, Summary of Significant Accounting Policies – Leases, to the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

During the three months ended March 31, 2022, there were no material changes to our critical accounting policies from those described in our audited consolidated financial statements for the year ended December 31, 2021 included in our Annual Report on Form 10-K filed with the SEC on March 15, 2022.

Recent Accounting Pronouncements

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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