What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-10 compared with 2022-08-11 · 99 added, 123 removed, 246 unchanged (47% of the section changed)

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The Company’s most advanced product candidates, EB613 for the treatment of osteoporosis and EB612 for the treatment of hypoparathyroidism, are in clinical development.

The Company completed a phase 2 dose ranging study for EB613 in 2021.

A Type C meeting with the FDA in relation to Entera’s proposed Phase 3 registrational study is expected in the second half of 2022.

Additionally, the Company aims to license its oral delivery technology to biopharmaceutical companies for use with their proprietary compounds.

The Company also aims to license its oral delivery technology to biopharmaceutical companies for use with their proprietary compounds.

Entera established such a collaboration with Amgen Inc., referred to as Amgen, in December 2018, for the use of Entera’s oral delivery platform in the field of inflammatory diseases.

See “Patent Transfer, licensing Agreements and Grant Funding—Amgen Research Collaboration and License Agreement” below for more information.

Parathyroid hormone (PTH) is an 84-amino acid hormone and the primary regulator of calcium and phosphate metabolism in bone and in the kidney.

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In total, more than 260 subjects have participated in Entera’s clinical trials to date.

Entera’s oral PTH (1-34) formulations have been administered collectively to a total of 225 subjects in two Phase 1 studies and three phase 2 studies (including 35 in two phase 2 hypoparathyroidism studies).

Subjects in the phase 2 osteoporosis study received EB613 daily for up to six months.

Entera’s oral PTH (1-34) formulations have been administered collectively to a total of 225 subjects in two Phase 1 studies and three phase 2 studies (161 subjects in our Phase 2 osteoperosis study and 35 subjects in two phase 2 hypoparathyroidism studies).

Osteoporosis is a disease characterized by low bone mass and structural deterioration of bone tissue, which leads to greater fragility of bones and an increase in fracture risk.

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The dose ranging Phase 2 study in postmenopausal women with low bone mass met its primary and key secondary endpoints and was presented in a late-breaker oral presentation at the 2021 ASBMR Annual Meeting.

For the primary efficacy endpoint:

a statistically significant increase in P1NP (a bone formation marker) at 3 months was achieved.

For the primary efficacy endpoint, a statistically significant increase in P1NP (a bone formation marker) at 3 months was achieved.

A significant dose response was observed for 0.5, 1.0, 1.5 and 2.5 mg oral PTH doses on P1NP, Osteocalcin and bone mineral density (“BMD”).

Subjects receiving the 2.5 mg dose of EB613 showed significant dose-related increases in BMD at the lumbar spine, total hip, and femoral neck at 6 months.

Subjects receiving the 2.5 mg dose of EB613 daily for 6 months had a significant placebo adjusted increase of 3.78% in lumbar spine BMD (p<0.008) which is similar to the 3.9% increase in lumbar spine BMD seen with Forteo ® at 6 months in clinical studies reported in published literature.

Subjects receiving the 2.5 mg dose of EB613 showed significant dose-related increases in BMD at the lumbar spine, total hip, and femoral neck at six months.

Subjects receiving the 2.5 mg dose of EB613 daily for six months had a significant placebo adjusted increase of 3.78% in lumbar spine BMD (p<0.008) which is similar to the 3.9% increase in lumbar spine BMD seen with Forteo ® at six months in clinical studies reported in published literature.

Increases in total hip and femoral neck BMD were greater than those previously reported with Forteo.

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clinical pharmacology study.

In December 2021 we held an end-of-Phase 2 meeting with the FDA to review the six-month phase 2 results and our proposed Phase 3 study protocol, our nonclinical and clinical development plan and the use of BMD, rather than fracture incidence, as the primary endpoint to support a New Drug Application (“NDA”).

In December 2021 we held an end-of-Phase 2 meeting with the FDA to review the six-month phase 2 results and our proposed Head-to-Head Non-Inferiority Phase 3 study protocol vs.

Forteo®, our nonclinical and clinical development plan and the use of BMD, rather than fracture incidence, as the primary endpoint to support a New Drug Application (“NDA”).

Following our End of Phase 2 Meeting with the FDA, Entera redesigned the pivotal phase 3 study for EB613 based on the FDA’s suggestion to explore a placebo-controlled trial.

The study proposed is an 18-month randomized, double-blind, multicenter study comparing the effects of oral PTH (1-34), (teriparatide), EB613 compared to placebo in post-menopausal women with osteoporosis at high risk of fracture, followed by a six-month open-label extension where all patients will be transitioned to alendronate, a standard of care anti-resorptive therapy.

Patients will be randomized in a 2:1 ratio to receive blinded treatments with either EB613 (N=400) 2.5 mg dose of oral PTH or Placebo (N=200).

The six-month extension phase of the study is intended to provide information on the transition from EB613 to a standard anti-resorptive therapy which has been shown to maintain or augment the increases in BMD following injectable PTH therapies, to preserve blinding of the prior therapy and to ensure that patients randomized to the placebo arm also receive an osteoporosis treatment.

The primary endpoint of the phase 3 study is the percent change in total hip BMD over 18 months of daily oral EB613 treatment as compared to the placebo.

Change in total hip BMD is incorporated as the primary endpoint, in line with the Foundation for the National Institutes of Health - American Society for Bone and Mineral Research Study to Advance Bone Mineral Density as a Regulatory Endpoint (FNIH-ASBMR SABRE).

The FNIH-ASBMR SABRE submitted a Qualification Plan for percentage change in total hip bone BMD as a surrogate endpoint for fracture.

This plan has been accepted by FDA’s Biomarker Qualification Program, with a request for submission of a Full Qualification Package.

According to the FNIH’s June 1, 2022 press release, the FNIH-ASBMR SABRE plans to submit the Full Qualification Package, for final approval by the FDA, by the end of the year.

The FNIH-ASBMR SABRE project investigators published meta-regression analyses based on patient-level BMD and fracture incidence data from 23 placebo-controlled fracture-endpoint studies across many classes of osteoporosis drugs, including subcutaneous teriparatide injection.

The FNIH-ASBMR SABRE project evaluations indicate that changes in total hip BMD (in comparison to lumbar spine or femoral neck BMD) is the best surrogate marker of an osteoporosis drug’s effects on vertebral, nonvertebral, all site and hip fracture risk.

The FNIH-ASBMR SABRE proposal is that changes in total hip BMD that equal or exceed Surrogate Threshold Effects (STEs) indicate fracture risk reduction.

In the planned oral PTH EB613 phase 3 study, statistical methods will compare the observed treatment effect of EB613 versus placebo, compared to the FNIH-ASBMR SABRE defined STEs associated with vertebral fracture, all site fracture and nonvertebral fracture risk reduction.

The study will also look at secondary endpoints including changes in lumbar spine and femoral neck BMD and EB613’s effects on biochemical markers of bone formation and resorption.

In the first half of 2022, Entera submitted to the FDA a Type C meeting request, briefing documents and its proposed Phase 3 design for a registrational study of EB613 based on this design.

A Type C meeting with the FDA in relation to Entera’s proposed Phase 3 registrational study is expected in the second half of 2022.

A Type C meeting with the FDA in relation to Entera’s proposed Phase 3 registrational study was held in the second half of 2022 and in October 2022, the Company concluded its Type C meeting and the FDA agreed that a single Phase 3 placebo-controlled study could support an NDA submission of EB613 (oral hPTH (1-34), teriparatide tablets) under the 505(b)(2) regulatory pathway.

The FDA also agreed that Total BMD could serve as the primary endpoint of the registrational study in post-menopausal osteoporosis patients.

Hypoparathyroidism

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Historically, the treatments for hypoparathyroidism have been calcium supplements, calcitriol or “active vitamin D” analogs and occasionally phosphate binders, the chronic use of which may result in serious side effects and significant costs to patients and healthcare systems.

Natpara ® (injectable PTH 1-84) for the treatment of hypoparathyroidism was approved in the United States in 2015 and at least temporarily withdrawn from the U.S.

market in September 2019 due to FDA’s concern about the potential for rubber particulate formation in Natpara ® .

This concern is specific to their device and not part of EB612 given we are proposing a tablet form of PTH.

Our lead product candidate for hypoparathyroidism, EB612, is delivered orally and may be administered in customized doses several times a day.

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EB612 induced a rapid decline in median serum phosphate levels and maintenance of target calcium levels throughout the study, even as patients were able to meaningfully reduce their calcium and active vitamin D supplementation which is key to reducing common comorbidities of this disease.

In the third quarter of 2019, we reported the results of a second Phase 2 clinical trial that included one day of dosing with EB612 to evaluate the pharmacokinetic/pharmacodynamics, or PK/PD, profile of various EB612 dose regimens compared with Natpara ® .

The results from this study demonstrated that EB612 was effectively delivered into the blood stream and activated PTH-dependent biological pathways that are inadequately activated in patients with hypoparathyroidism.

In addition, the various dosing regimens demonstrated positive impacts on serum calcium, urine calcium and serum phosphate levels.

No serious adverse events were reported.

The pilot 4-month Phase 2 results for EB612 were presented at ASBMR 2015 and published in a peer-reviewed journal, JBMR, in 2021.

The Phase 2 PK-PD study versus Natpara® was presented at ASBMR 2019.

We have since developed an improved formulation of EB612 based on new intellectual property, optimization of its PK profile and the potential for reduced daily dosing for hypoparathyroidism.

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and European Union (“EU”) orphan drug designation for EB612.

In addition to the utilization of our technology to develop our own internal drug candidates, we intend to use our technology as a platform for the oral delivery of additional approved and novel peptide and therapeutic proteins.

We believe our proprietary technology has advantages over alternative delivery options and may enable us to create a potential pipeline of products across a range of therapeutic indications.

We have generated data on a number of additional proteins and peptides in molecules as large as 150 kilodaltons, or kDa, and may develop these candidates further internally, or explore potential business development collaborations to advance these therapies through clinical development produce non-dilutive funding and diversify our revenue stream.

In December 2018, we entered into a research collaboration and license agreement with Amgen.

Under the agreement, we and Amgen have agreed to collaborate on the development and discovery of clinical candidates in the field of inflammatory disease and other serious illnesses.

Specifically, we and Amgen have agreed to use our proprietary drug delivery platform to help Amgen develop oral formulations for up to three large molecule drug candidates within Amgen’s pipeline.

Further, under the terms of the agreement, we have agreed to conduct preclinical development activities, at Amgen’s expense, and Amgen will be responsible for research, clinical development, manufacturing and commercialization of any of the resulting programs, at its expense.

We will be eligible to receive from Amgen aggregate payments of up to $270 million upon achievement of various clinical and commercial milestones or Amgen’s exercise of its option to select up to two additional programs to include in the collaboration, as well as tiered royalty payments based on percentages ranging from the low to mid-single digits based on the level of Amgen’s net sales of any applicable products, if approved.

We will retain all intellectual property rights to our drug delivery technology, which under this collaboration will be licensed to Amgen exclusively for Amgen’s selected drug targets.

Amgen will retain all rights to its large molecules, including any subsequent improvements.

In February 2021, we announced that we had initiated a new research program for an oral glucagon-like peptide-2 (GLP-2) analog based on the Company’s platform technology.

GLP-2, a peptide produced in the intestine and the central nervous system via the brainstem and hypothalamus, is known to enhance intestinal absorption, specifically the increased absorption of nutrients.

The only GLP-2 analog currently on the market, teduglutide, was approved in 2012 as a once daily injection for the treatment of short bowel syndrome in the United States and Europe, registering global sales of $613 million in 2020.

In preclinical models, our oral formulation of a GLP-2 analog has shown a comparable pharmacokinetic profile to a subcutaneous injection.

In addition, GLP-2 analogs are an important category of new therapies for many metabolic diseases and therefore we believe this product candidate is well positioned for partnering opportunities.

We intend to utilize future funds, as available, to advance EB613 and EB612 through clinical development and ultimately towards regulatory approval.

In addition, we are currently evaluating the potential for a strategic transaction involving EB613’s phase 3 clinical development and commercialization.

To date, we have funded our operations through both public and private sales of our Ordinary Shares and other equity or equity-linked securities, convertible debt, government grants and through revenues generated from research collaboration and our license agreement with Amgen.

We have no products that have received regulatory approval and have never generated revenue from product sales.

Since our inception, we have raised a total of $84.7 million in various public and private equity offerings, as well as from grants, and the exercise of options and warrants.

Since inception, we have incurred significant losses.

For the three months ended June 30, 2022 and 2021, our operating losses were $3.2 million and $2.6 million, respectively.

In addition, for the six months ended June 30, 2022 and 2021, our operating losses were $7.1 and $4.9 million, respectively, and we expect to continue to incur significant expenses and losses for the foreseeable future.

As of June 30, 2022, we had an accumulated deficit of $89.4 million.

For the three months ended September 30, 2022 and 2021, our operating losses were $2.9 million and $3.2 million, respectively.

In addition, for the nine months ended September 30, 2022 and 2021, our operating losses were $9.9 million and $8.1 million, respectively, and we expect to continue to incur significant expenses and losses for the foreseeable future.

As of September 30, 2022, we had an accumulated deficit of $92.5 million.

Our losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical trials, our expenditures on research and development activities and payments under the collaboration with Amgen or any future collaborations into which we may enter.

As of June 30, 2022, we had cash and cash equivalents of $17.3 million.

We believe that our existing cash resources, not including potential milestone payments, will be sufficient to meet our projected operating requirements through the second quarter of 2023.

As of September 30, 2022, we had cash and cash equivalents of $14.3 million.

We believe that our existing cash resources will be sufficient to meet our projected operating requirements through the second quarter of 2023.

This assumes ongoing R&D, the Hypo PK study and continued investments in production, analytics, and clinical research operations to enable initiation of EB613 phase 3 during the second half of 2023.

This does not include potential partnership payments.

In order to fund further operations, we will need to raise additional capital.

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See “Item 1A—Risk Factors—Risks Related to Our Financial Position and Need for Additional Capital” in our 2021 Annual Report.

As of June 30, 2022, we had 22 full-time employees and four consultants who provide services to us on a part-time basis.

As of September 30, 2022, we had 19 full-time employees and three consultants who provide services to us on a part-time basis.

Our operations are located in Jerusalem, Israel.

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Both parties can terminate the agreement for a material breach by the other party that goes uncured, subject to a 90-day notice period.

The Israeli Innovation Authority Grants

We have received grants of approximately $0.5 million from the Israeli Innovation Autority (“IIA”) to partially fund our research and development.

Israeli Innovation Authority Grants

We have received grants of approximately $0.5 million from the Israeli Innovation Authority (“IIA”) to partially fund our research and development.

The grants are subject to certain requirements and restrictions under the Israeli Encouragement of Research, Development and Technological Innovation in Industry Law 5477-1984, referred to as the Research Law.

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Following the signing of the Amgen Agreement, we have been required to pay 5.38% of each payment by Amgen and up to 600% of the grant received.

As of June 30, 2022, we had paid royalties to the IIA in the amount of $79,000 related to the Amgen Agreement.

As of September 30, 2022, we had paid royalties to the IIA in the amount of $79,000 related to the Amgen Agreement.

In addition to paying any royalties due, we must abide by other restrictions associated with receiving IIA grants under the Research Law that continue to apply following repayment to the IIA.

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To date, we have not generated any revenue from sales of our products, and we do not expect to receive any revenue from our product candidates unless and until we obtain regulatory approval and successfully commercialize our products.

Under the Amgen Agreement, through June 30, 2022, we had received an aggregate amount of $968,000 from Amgen for research and development services.

Under the Amgen Agreement, through September 30, 2022, we had received an aggregate of $968,000 from Amgen for research and development services.

In addition, we have several Material Transfer Agreements, or MTA agreements, under which we generate revenue.

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We did not recognize any revenues from royalties because royalties are payable based on future commercial sales, as defined in the Amgen Agreement, and there have been no commercial sales.

For the three months ended June 30, 2022 and 2021, we recognized revenues from the Amgen Agreement and other MTA agreements in the total amounts of $44 thousand and $109 thousand, respectively.

In addition, we recognized $112 thousand and $266 thousand under these agreements for the six months ended June 30, 2022 and 2021, respectively.

For the three months ended September 30, 2022 and 2021, we recognized revenues from the Amgen Agreement and other MTA agreements in the total amounts of $8 thousand and $140 thousand, respectively.

In addition, we recognized $120 thousand and $406 thousand under these agreements for the nine months ended September 30, 2022 and 2021, respectively.

Research and Development Expenses

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An intangible asset arising from the development of our product candidates is recognized if certain capitalization conditions are met.

For the three and six months ended June 30, 2022 and 2021, we did not capitalize any development costs.

For the three and nine months ended September 30, 2022 and 2021, we did not capitalize any development costs.

Our research and development expenses may vary substantially from period to period based on the timing of our research and development activities, including due to the timing of initiation of clinical trials and the enrollment of patients in clinical trials.

For the three months ended June 30, 2022 and 2021, our research and development expenses were $1.4 million and $1.2 million, respectively.

For the six months ended June 30, 2022 and 2021, our research and development expenses were $3.1 million and $2.4 million, respectively.

Research and development expenses for both the three and six months ended June 30, 2022 and 2021 were primarily for the development of EB613.

For the three months ended September 30, 2022 and 2021, our research and development expenses were $1.4 million and $1.8 million, respectively.

For the nine months ended September 30, 2022 and 2021, our research and development expenses were $4.5 million and $4.1 million, respectively.

Research and development expenses for both the three and nine months ended September 30, 2022 and 2021 were primarily for the development of EB613, which is our most-advanced product candidate.

The successful development of our product candidates is highly uncertain.

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Taxes on Income

We have not generated taxable income since our inception, and, as of June 30, 2022, we had carry-forward tax losses of $61.5 million.

We have not generated taxable income since our inception, and, as of September 30, 2022, we had carry-forward tax losses of $64.2 million.

We anticipate that we will be able to carry forward these tax losses indefinitely to future tax years.

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We provided a full valuation allowance with respect to the deferred tax assets related to these carry forward losses of the Company.

As of June 30, 2022, our subsidiary, Entera Bio Inc., had no carry forward tax losses.

As of September 30, 2022, our subsidiary, Entera Bio Inc., had no carry forward tax losses.

Results of Operations

Comparison of Three Months Ended June 30, 2022 and 2021

Comparison of Three Months Ended September 30, 2022 and 2021

Three Months Ended

September 30,

Increase (Decrease)

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Operating loss

Financial (income) loss, net

Financial loss, net

Income tax benefit

Revenues for the three months ended June 30, 2022 and 2021 were $44,000 and $109,000, respectively.

For both the three months ended June 30, 2022 and 2021, the majority of our revenues were attributable to pre-clinical R&D services provided to Amgen under the Amgen Agreement and other MTA agreements.

Revenues for the three months ended September 30, 2022 and 2021 were $8,000 and $140,000, respectively.

For both the three months ended September 30, 2022 and 2021, the majority of our revenues were attributable to pre-clinical R&D services provided to Amgen under the Amgen Agreement.

The decrease in revenue for the quarter ended September 30, 2022 as compared to the prior year period was primarily due to finalization of third year pre-clinical R&D services.

Cost of Revenues

Cost of revenues for the three months ended June 30, 2022 was $33,000 compared to $99,000 for the three months ended June 30, 2021 and was primarily attributed to salaries and related expenses in connection with the R&D services provided to Amgen and other MTA agreements.

Cost of revenues for the three months ended September 30, 2022 was $6,000 compared to $65,000 for the three months ended September 30, 2021 and was primarily attributed to salaries and related expenses in connection with the R&D services provided to Amgen.

The decrease in cost of revenues for the three months ended September 30, 2022 was primarily due to decreased revenues under the Amgen Agreement, as described above.

Research and Development Expenses

Research and development expenses for three months ended June 30, 2022 were $1.4 million, as compared to $1.2 million for the three months ended June 30, 2021.

The increase of $0.2 million was primarily due to an increase of $0.2 million in pre-clinical activity as part of the preparation for our Phase 3 clinical trial for EB613 and an increase of $0.2 million in employee's compensation mainly related to the separation agreement with the President of R&D, including share-based compensation, which was offset by a decrease of $0.2 million in other clinical trial expenses related to our Phase 2 trial for EB613 that was completed in June 2021.

Research and development expenses for three months ended September 30, 2022 were $1.4 million, as compared to $1.8 million for the three months ended September 30, 2021.

The decrease of $0.4 million was primarily due to a decrease of $0.7 million in pre-clinical activity, as part of the preparation for our Phase 3 clinical trial for EB613, and a decrease of $0.1 million in other clinical trial expenses related to our Phase 2 trial for EB613, which we completed in June 2021.

This decrease was partially offset by an increase of $0.1 million in employee compensation mainly related to one-time payment to our former President of R&D and an increase of $0.3 million in materials and production costs for our Phase 3 clinical trial for EB613.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2022 were $1.9 million compared to $1.4 million for the three months ended June 30, 2021.

The increase of $0.5 million was mainly attributable to an increase of $0.2 million in share-based compensation granted to non-executive directors, an increase of $0.2 million in professional fees and an increase of $0.1 million in D&O insurance costs.

Financial (Income) Loss (Income), Net

Financial (income) loss, net for the three months ended June 30, 2022 and 2021 was $(60,000) and $24,000, respectively.

General and administrative expenses for both the three months ended September 30, 2022 and 2021 were $1.5 million.

For the quarter ended September 30, 2022, there was an increase of $0.2 million in professional fees and an increase of $0.1 million in D&O insurance costs, as compared to the 2021 period, which was partially offset by a decrease of $0.3 million in share-based compensation mainly due to a reversal of share-based compensation expense related to the separation agreement of our former Chief Executive Officer.

Financial Loss, Net

Financial loss, net for the three months ended September 30, 2022 and 2021 was $8,000 and $7,000, respectively.

Our financial income is composed mainly of exchange rate differences of certain currencies against our functional currency, which is the U.S.

Comparison of Six Months Ended June 30, 2022 and 2021

Six Months Ended

Comparison of Nine Months Ended September 30, 2022 and 2021

Nine Months Ended

September 30,

Increase (Decrease)

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Operating loss

Financial income, net

Income tax benefit

Revenues for the six months ended June 30, 2022 and 2021 were $112,000 and $266,000, respectively.

For both the six months ended June 30, 2022 and 2021, the majority of our revenues were attributable to pre-clinical R&D services provided to Amgen under the Amgen Agreement and other MTA agreements.

Financial loss (income), net

Income tax benefit(expense)

Revenues for the nine months ended September 30, 2022 and 2021 were $120,000 and $406,000, respectively.

For both the nine months ended September 30, 2022 and 2021, the majority of our revenues were attributable to pre-clinical R&D services provided to Amgen under the Amgen Agreement and other MTA agreements.

The decrease in revenue for the nine months ended September 30, 2022 as compared to the prior year period was primarily due to finalization of third year pre-clinical R&D services.

Cost of Revenues

Cost of revenues for the six months ended June 30, 2022 was $87,000 compared to $172,000 for the six months ended June 30, 2021 and were primarily attributed to salaries and related expenses in connection with the R&D services provided to Amgen and other MTA agreements.

Cost of revenues for the nine months ended September 30, 2022 was $93,000 compared to $237,000 for the nine months ended September 30, 2021 and were primarily attributed to salaries and related expenses in connection with the R&D services provided to Amgen and other MTA agreements.

The decrease in cost of revenues for the nine months ended September 30, 2022 as compared to the prior year period was primarily due to decreased revenues under the Amgen Agreement, as described above

Research and Development Expenses

Research and development expenses for six months ended June 30, 2022 were $3.1 million, as compared to $2.4 million for the six months ended June 30, 2021.

The increase of $0.7 million was primarily due to an increase of $0.7 million in materials, production costs and pre-clinical activity as part of the preparation for our Phase 3 clinical trial for EB613 and an increase of $0.4 million in employee's compensation mainly related to the separation agreement with our Former President of R&D, which was offset by a decrease of $0.4 million in other clinical trial expenses related to our Phase 2 trial for EB613 that was completed in June 2021.

Research and development expenses for nine months ended September 30, 2022 were $4.5 million, as compared to $4.1 million for the nine months ended September 30, 2021.

The increase of $0.4 million was primarily attributed to an increase of $0.7 million in continued materials and production costs, strengthening the R&D organization in preparation for EB613’s proposed phase 3 study and an increase of $0.6 million in employee's compensation mainly related to a one-time payment to our former President of R&D, which were partially offset by a decrease of $0.5 million related to our the completion of our Phase 2 trial for EB613 in September 2021, and $0.4 million in pre-clinical activities related to supporting our Phase 3 clinical trial for EB613.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2022 were $4.1 million compared to $2.7 million for the six months ended June 30, 2021.

The increase of $1.4 million was mainly attributable to an increase of $0.8 million in share-based compensation granted to non-executive directors and employees, an increase of $0.4 million in legal, accounting fees and other consultant fees, and an increase of $0.2 million in D&O insurance costs.

Financial Income, Net

Financial income, net for the six months ended June 30, 2022 and 2021 was $104,000 and $5,000, respectively.

General and administrative expenses for the nine months ended September 30, 2022 were $5.5 million compared to $4.2 million for the nine months ended September 30, 2021.

The increase of $1.3 million was mainly attributable to an increase of $0.5 million in non-cash share-based compensation granted to directors and executive officers and a one-time payment to our former Chief Executive Officer.

Additionally, there was an increase of $0.4 million in legal and professional fees and an increase of $0.3 million in D&O insurance costs.

Financial Loss (Income), Net

Financial loss (income), net for the nine months ended September 30, 2022 and 2021 was $(96,000) and $2,000, respectively.

Our financial income is composed mainly of exchange rate differences of certain currencies against our functional currency, which is the U.S.

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Since inception, we have incurred significant losses.

For the three months ended June 30, 2022 and 2021, our operating losses were $3.2 million and $2.6 million, respectively.

As of June 30, 2022, we had an accumulated deficit of $89.4 million.

For the three months ended September 30, 2022 and 2021, our operating losses were $2.9 million and $3.2 million, respectively.

In addition, for the nine months ended September 30, 2022 and 2021, our operating losses were $9.9 and $8.1 million, respectively, and we expect to continue to incur significant expenses and losses for the foreseeable future.

As of September 30, 2022, we had an accumulated deficit of $92.5 million.

We expect to continue to incur significant expenses and losses for the next several years as we advance our products through development and provide administrative support for our operations.

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See in “Item 1A-Risk Factors” in our 2021 Annual Report.

Since our inception, we have raised a total of $84.7 million, including $25.3 million through our Prior ATM Program and our ATM Program (each as defined below), of which $21.8 million was raised in 2021, $14.3 million in our December 2019 private placement, $11.2 million in our IPO in 2018 and $33.9 million in aggregate funding from a combination of grants, exercise of options and warrants and private placements of Ordinary Shares, preferred shares and debt prior to our IPO.

In addition, through June 30, 2022, we had have received approximately $1.4 million under the Amgen Agreement.

As of June 30, 2022, we had cash and cash equivalents of $17.3 million.

Since our inception, we have raised a total of $84.7 million, including $25.3 million through our Prior ATM Programs and our SVB ATM Program (each as defined below), of which $21.8 million was raised in 2021, $14.3 million in our December 2019 private placement, $11.2 million in our IPO in 2018 and $33.9 million in aggregate funding from a combination of grants, exercise of options and warrants and private placements of Ordinary Shares, preferred shares and debt prior to our IPO.

In addition, through September 30, 2022, we had have received approximately $1.4 million under the Amgen Agreement.

As of September 30, 2022, we had cash and cash equivalents of $14.3 million.

Our primary uses of cash have been to fund research and development, general and administrative and working capital requirements, and we expect these will continue to be our primary uses of cash.

In July 2020, we entered into an equity distribution agreement with Canaccord Genuity LLC, as sales agent, to implement an at-the-market offering program under which we, from time to time, were able to offer and sell our Ordinary Shares, having an aggregate offering amount of up to $13.9 million (the “Prior ATM Program”).

Offers and sales under the Prior ATM Program had been registered on a registration statement on From F-3 (the “Prior Registration Statement”).

The Prior ATM Program terminated in accordance with its terms following our sale of the full dollar amount of Ordinary Shares permitted thereunder.

Offers and sales under the Prior Canaccord ATM Program had been registered on a registration statement on From F-3 (the “Prior Registration Statement”).

The Prior Canaccord ATM Program terminated in accordance with its terms following our sale of the full dollar amount of Ordinary Shares permitted thereunder.

On May 7, 2021 we entered into an At Market Issuance Sales Agreement with B.

Riley Securities, Inc., as sales agent, under which we, from time to time, may had been able to offer and sell up to 5,000,000 Ordinary Shares (the “ATM Program”).

The sales agent is entitled to a fixed commission of 3% of the aggregate gross proceeds as well as and reimbursement of expenses.

For the year ended December 31, 2021, we sold an aggregate of 2,546,265 Ordinary Shares under the Prior ATM Program and 1,764,860 Ordinary Shares under the ATM Program, the aggregate proceeds of which amounted to $21.8 million, net of issuance costs, in each case in offerings registered under the Prior Registration Statement.

Riley Securities, Inc., as sales agent, under which we, from time to time, may had been able to offer and sell up to 5,000,000 Ordinary Shares (the “Prior B.

Riley ATM Program,” together with the Prior Canaccord ATM Program, the “Prior ATM Programs”).

The sales agent was entitled to a fixed commission of 3% of the aggregate gross proceeds as well as and reimbursement of expenses.

For the year ended December 31, 2021, we sold an aggregate of 2,546,265 Ordinary Shares under the Prior Canaccord ATM Program and 1,764,860 Ordinary Shares under the Prior B.

Riley ATM Program, the aggregate proceeds of which amounted to $21.8 million, net of issuance costs, in each case in offerings registered under the Prior Registration Statement.

Following our loss of foreign private issuer status on January 1, 2022, we were no longer able to effect offers and sales under our Prior Registration Statement;

therefore, we filed a new shelf registration statement on Form S-3 (file no.

333-365286) on May 27, 2022 to, among other things, facilitate our use of the ATM Program.

On May 27,2022 we entered into Amended Restated At Market Issuance Sales Agreement with B.

Riley Securities, Inc., as sales agent, as a replacement to our May 2021 agreement, which we, from time to time, may had been able to offer and sell up to 5,000,000 Ordinary Shares (the “Amended ATM Program”).

333-365286) on May 27, 2022 to, among other things, facilitate our use of the Amended B.

Riley ATM Program and SVB ATM Program (each as defined below).

On May 27,2022 we entered into an Amended and Restated at Market Issuance Sales Agreement with B.

Riley Securities, Inc., as sales agent, which we, from time to time, were able to offer and sell up to 5,000,000 Ordinary Shares (the “Amended B.

Riley ATM Program”).

Effective August 30, 2022, we terminated the Amended B.

Riley ATM Program, and we had not sold any shares under such agreement.

On September 2, 2022, we entered into a Sales Agreement with SVB Securities LLC, as sales agent, to implement an at-the-market offering program under which we may from time to time offer and sell up to 5,000,000 Ordinary Shares (the “SVB ATM Program”) under our currently effective Registration Statement on Form S-3 and a related prospectus supplement forming a part thereof.

The sales agent is entitled to a fixed commission of 3% of the aggregate gross proceeds as well as and reimbursement of expenses.

We have not sold any additional shares under the ATM Program or Amended ATM Program during the six months ended June 30, 2022.

As of September 30, 2022, we had not sold any shares under the SVB ATM Program.

Funding Requirements

We believe that our existing capital resources, not including potential milestone payments, will be sufficient to meet our projected operating requirements through the second quarter of 2023.

We believe that our existing cash resources will be sufficient to meet our projected operating requirements through the second quarter of 2023.

This assumes ongoing R&D, the Hypo PK study and continued investments in production, analytics, and clinical research operations to enable initiation of EB613 phase 3 during the second half of 2023.

This does not include potential partnership payments.

We have based these estimates on assumptions that maybe the different from the actual results, and we may use our available capital resources sooner than we currently expect.

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However, there is no certainty about our ability to obtain such funding.

We do not have any committed external sources of funds.

Other than the SVB ATM Program, we do not have any committed external sources of funds.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our then-existing shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that may adversely affect our existing shareholders’ rights as shareholders.

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If we are unable to raise additional funds through equity or debt financings or collaborations, 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 our oral PTH product candidates and any other product candidates that we would otherwise prefer to develop and market ourselves.

Our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2022 included elsewhere in this Quarterly Report note that there is substantial doubt about our ability to continue as a going concern as of such date.

Our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2022 included elsewhere in this Quarterly Report note that there is substantial doubt about our ability to continue as a going concern as of such date.

This means that our management has expressed substantial doubt about our ability to continue our operations without an additional infusion of capital from external sources.

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In that case, investors might receive less than the value at which those assets are carried on our financial statements, and it is likely that investors would lose all or a part of their investment.

Six Months Ended June 30, 2022 compared to Six Months Ended June 30, 2021

Nine Months Ended September 30, 2022 compared to Nine Months Ended September 30, 2021

The following table sets forth the primary sources and uses of cash for each of the periods set forth below:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended June 30, 2022 was $7.6 million, consisting primarily of our operating loss of $7.1 million and an increase of $2.2 million in our working capital, which was partially offset by approximately $1.7 million of share-based compensation and depreciation expenses.

Net cash used in operating activities for the six months ended June 30, 2021 was $4.4 million consisting primarily of our operating loss of $4.9 million and an increase of $0.4 million in our working capital which were partially offset by $0.9 million of share-based compensation expense.

The increase of $3.2 million in cash used in operating activities for the six months ended June 30, 2022 compared to the same period in 2021 was mainly attributed to an increase of $2.2 million in our operating loss, an increase of $1.8 in working capital mainly due to payments to suppliers and services providers, which were partially offset by an increase of $0.8 million in share-based compensation.

Net cash used in operating activities for the nine months ended September 30, 2022 was $10.5 million, consisting primarily of our operating loss of $9.9 million and an increase of $2.4 million in our working capital, which was partially offset by approximately $1.8 million of share-based compensation expense.

Net cash used in operating activities for the nine months ended September 30, 2021 was $6.6 million consisting primarily of our operating loss of $8.1 million which was partially offset by $1.5 million of share-based compensation expense.

The increase of $3.9 million in cash used in operating activities for the nine months ended September 30, 2022 compared to the same period in 2021 was mainly attributed to an increase of $1.8 million in our operating loss, an increase of $2.4 million in working capital primarily due to payments to suppliers and services providers, which was partially offset by an increase of $0.3 million in share-based compensation expense.

Net Cash Used in Investing Activities

Net cash used in investing activities for the six months ended June 30, 2022 consisted primarily of the purchase of property and equipment.

For the six months ended June 30, 2021, no cash was used in or provided by investing activities.

Net cash used in investing activities for the nine months ended September 30, 2022 consisted primarily of the purchase of property and equipment and withdrawal of funds in connection with terms of certain employees’ retirement.

Net cash used in investing activities for the nine months ended September 30, 2021 consisted purchase of property and equipment.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2022 consisted net proceeds of $13 thousand from the exercise by a former employee of options to purchase Ordinary Shares.

Net cash provided by financing activities for the six months ended June 30, 2021 consisted primarily of the net proceeds of $19.4 million from the issuance of Ordinary Shares under our ATM Program and $3.4 million from exercise of options and warrants.

Net cash provided by financing activities for the nine months ended September 30, 2022 consisted of net proceeds of $13 thousand from the exercise of options to purchase Ordinary Shares.

Net cash provided by financing activities for the nine months ended September 30, 2021 consisted primarily of the net proceeds of $21.8 million from the issuance of Ordinary shares under our Prior ATM Programs and $3.5 million from the exercise of options and warrants.

Contractual Obligations

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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