What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-12 · 76 added, 70 removed, 266 unchanged (35% of the section changed)

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We believe our world-class team’s capabilities and experience, further guided by our scientific advisory board, which includes the world’s leading experts in the RAS/MAPK pathway, uniquely position us to achieve our bold mission of erasing cancer.

Our lead product candidate is naporafenib, a pan-RAF inhibitor with first-in-class and best-in-class potential for patients with NRASm melanoma, RAS Q61X solid tumors, and other RAS/MAPK pathway-driven tumors.

Our lead product candidate is naporafenib, a pan-RAF inhibitor with first-in-class and best-in-class potential for patients with NRASm melanoma and other RAS/MAPK pathway-driven tumors.

RAF proteins are ubiquitously expressed serine-threonine kinases that constitute a key node of the RAS/MAPK pathway downstream of RAS and upstream of MEK.

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We in-licensed naporafenib from Novartis Pharma AG (Novartis) in December 2022.

Naporafenib has been dosed in over 500 patients to date, whereby safety, tolerability, pharmacokinetics (PK), and pharmacodynamics have been established in both monotherapy and select combinations, with clinical proof-of-concept (PoC) data in combination with trametinib (MEKINIST) for patients with NRASm melanoma, which includes NRAS Q61X melanoma, and preliminary clinical PoC

data in combination with trametinib for patients with RAS Q61X NSCLC.

In December 2023, we announced that the US Food and Drug Administration (FDA) granted Fast Track Designation (FTD) to naporafenib in combination with trametinib for the treatment of adult patients with unresectable or metastatic melanoma who have progressed on, or are intolerant to, an anti ‑ programmed death-1 (ligand 1) (PD ‑ (L)1)-based regimen, and whose tumors contain an NRAS mutation (NRASm).

In December 2023, we announced that the US Food

and Drug Administration (FDA) granted Fast Track Designation (FTD) to naporafenib in combination with trametinib for the treatment of adult patients with unresectable or metastatic melanoma who have progressed on, or are intolerant to, an anti ‑ programmed death-1 (ligand 1) (PD ‑ (L)1)-based regimen, and whose tumors contain an NRAS mutation (NRASm).

Programs that receive FTD may benefit from early and frequent interactions with the FDA during the clinical development process and, if relevant criteria are met, the FDA may consider reviewing portions of a marketing application before the sponsor submits the complete application.

We are pursuing a broad development strategy for naporafenib, which includes our SEACRAFT trials designed to evaluate naporafenib’s development opportunities in combination with other targeted therapies.

We are prioritizing rapid development for naporafenib plus trametinib in the Phase 1b SEACRAFT-1 trial for patients with RAS Q61X solid tumors, which we initiated in the third quarter of 2023, and in the Phase 3 SEACRAFT-2 trial for patients with NRASm melanoma, which we initiated in the second quarter of 2024.

SEACRAFT-1 is supported by clinical PoC data in patients with NRAS Q61X melanoma and preliminary clinical PoC data in patients with KRAS Q61X NSCLC.

Our development strategy for naporafenib includes our SEACRAFT trials designed to evaluate naporafenib in combination with other targeted therapies.

We are advancing development for naporafenib plus trametinib in the Phase 3 SEACRAFT-2 trial for patients with NRASm melanoma, which we initiated in the second quarter of 2024.

SEACRAFT-2 is supported by clinical PoC data in patients with NRASm melanoma, as presented by Novartis at the European Society for Medical Oncology Congress 2022 medical conference and as published in March 2023 by de Braud et al.

in the Journal of Clinical Oncology .

In connection with our SEACRAFT-1 and -2 trials, we have entered into clinical trial collaboration and supply agreements (CTCSAs) with Novartis for its MEK inhibitor, trametinib.

Pursuant to the CTCSAs, we are sponsoring and funding the clinical trials and Novartis is providing its drug to us free of charge.

In connection with our SEACRAFT-2 trial, we have entered into a clinical trial collaboration and supply agreement (CTCSA) with Novartis for its MEK inhibitor, trametinib.

Pursuant to the CTCSA, we are sponsoring and funding the clinical trial and Novartis is providing its drug to us free of charge.

In addition, we are evaluating additional combinations of naporafenib with our other RAS/MAPK pathway targeting agents and/or external agents in preclinical models.

We anticipate reporting Phase 1b combination data from SEACRAFT-1 in the fourth quarter of 2024.

We expect to readout randomized dose optimization data of naporafenib plus trametinib against a single agent MEK inhibitor (trametinib) from Stage 1 of the SEACRAFT-2 trial in 2025.

Stage 2 of the SEACRAFT-2 trial is expected to compare naporafenib plus trametinib against physician's choice of chemotherapy or trametinib using dual primary endpoints of progression free survival and overall survival for regulatory approval.

On October 24, 2024, we announced preliminary data from our SEACRAFT-1 trial in an oral presentation at the 36th EORTC-NCI-AACR (ENA) Symposium.

The preliminary clinical activity of naporafenib plus trametinib in the melanoma cohort of SEACRAFT-1 include, as of the efficacy cutoff date*:

• 40% (4/10) response rate observed in the efficacy-evaluable patients with NRAS Q61X melanoma, including three confirmed partial responses and one unconfirmed partial response;

the melanoma cohort in SEACRAFT-1 is generally representative of the patient population currently being enrolled in the pivotal SEACRAFT-2 trial

• 70% (7/10) of patients remained on treatment as of the data cutoff, including all four responders

* Safety data cutoff date was September 3, 2024.

Efficacy data cutoff date was September 5, 2024.

In addition, we reported that naporafenib plus trametinib has been generally well tolerated as of the safety cutoff date, with mostly low-grade adverse events in the majority of patients.

We believe that the use of mandatory primary rash prophylaxis helped reduce the frequency and severity of skin toxicities, reduced the drug discontinuation rate due to adverse events, and improved the observed tolerability as measured by the increased relative dose intensity, as compared to the prior clinical trials of naporafenib plus trametinib conducted by Novartis, which did not include the use of mandatory primary rash prophylaxis.

We believe that while the preliminary SEACRAFT-1 data do not support further exploration of a tissue-agnostic indication, they do reinforce the potential of the ongoing Phase 3 SEACRAFT-2 trial in patients with NRASm melanoma.

We expect to read out randomized dose optimization data of naporafenib plus trametinib from Stage 1 of the SEACRAFT-2 Phase 3 trial in 2025.

Stage 2 of the SEACRAFT-2 Phase 3 trial is expected to compare naporafenib plus trametinib against physician's choice of chemotherapy or trametinib using dual primary endpoints of progression free survival and overall survival for regulatory approval.

Our next two programs are part of our RAS-targeting franchise, which we in-licensed in May 2024, as described below.

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It also showed superior clearance, half-life, oral bioavailability, and kinetic solubility in preclinical evaluations.

The initial clinical trial for ERAS-0015 will be named AURORAS-1, for which we plan to file an investigational new drug application (IND) in the first half of 2025, with an anticipated Phase 1 monotherapy data readout in 2026.

The initial clinical trial for ERAS-0015 will be AURORAS-1, for which we plan to file an investigational new drug application (IND) in the first half of 2025, with an anticipated Phase 1 monotherapy data readout in 2026.

ERAS-4001 is a potential first-in-class pan-KRAS inhibitor for treating patients with KRAS-altered solid tumors.

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Sparing wild-type HRAS and NRAS has the potential to provide a greater therapeutic window.

ERAS-4001 showed activity against both GDP-bound (“inactive state”) and GTP-bound (“active state”) KRAS G12D with single digit nanomolar IC 50 s in a biochemical RAS – RAF1 RBD (RAS Binding Domain) assay.

In vivo, ERAS-4001 showed good tumor regression in multiple models.

In combination with anti-PD-1, ERAS-4001 was able to achieve complete disappearance of tumors in mice on day 31.

The initial clinical trial for ERAS-4001 will be named BOREALIS-1, for which we plan to file an IND in the first quarter of 2025, with an anticipated Phase 1 monotherapy data readout in 2026.

The initial clinical trial for ERAS-4001 will be BOREALIS-1, for which we plan to file an IND in the first quarter of 2025, with an anticipated Phase 1 monotherapy data readout in 2026.

ERAS-0015 and ERAS-4001 have the potential to address unmet needs in approximately 2.7 million patients who are diagnosed annually globally with RAS-mutant tumors, of which over 2.2 million patients are diagnosed with KRAS-mutant tumors.

In May 2024, in connection with entering into the Joyo License Agreement and Medshine License Agreement, a review of our strategic priorities, and our decision to deemphasize certain drug discovery activities, we approved a strategic reprioritization to focus our resources on our naporafenib program, ERAS-0015, and ERAS-4001.

We deprioritized our HERKULES-3 clinical trial evaluating ERAS-007 in combination with encorafenib and cetuximab (EC) in patients with EC-naïve BRAFm colorectal cancer

as we believe the clinical efficacy data do not support continued evaluation.

We also deprioritized our THUNDERBBOLT-1 clinical trial evaluating ERAS-801 in patients with recurrent glioblastoma (GBM), although we plan to explore further advancement of ERAS-801, including via select investigator-sponsored trials.

We deprioritized our HERKULES-3 clinical trial evaluating ERAS-007 in combination with encorafenib and cetuximab (EC) in patients with EC-naïve BRAFm colorectal cancer as we believe the clinical efficacy data do not support continued evaluation.

Finally, we deprioritized our preclinical ERAS-4 program;

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Pursuant to the Sale Agreement, the Agent will receive a commission from us of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sale Agreement.

As of June 30, 2024, we had not sold any shares of our common stock under the Sale Agreement.

In July 2024, we sold 9,231,114 shares of common stock under the Sale Agreement at a price of $2.37 per share.

Proceeds from the ATM Offering in July 2024 were $21.1 million, net of commissions and expenses of $0.8 million.

During the three months ended September 30, 2024, we sold 9,231,114 shares of common stock under the Sale Agreement at a weighted-average price of $2.37 per share.

Proceeds from the ATM Offering during the three months ended September 30, 2024 were $21.0 million, net of commissions and expenses of $0.8 million.

Since our inception in 2018, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, identifying, acquiring, and in-licensing our product candidates, establishing our intellectual property portfolio, conducting research, preclinical studies and clinical trials, establishing arrangements with third parties for the manufacture of our product candidates and related raw materials, and providing general and administrative support for these operations.

We do not have any products approved for sale and have not generated any revenue.

As of June 30, 2024, we have raised a total of $994.4 million to fund our operations, comprised primarily of gross proceeds from our IPO, 2022 Offering, 2024 Private Placement, and 2024 Offering and the sale and issuance of convertible preferred stock.

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $460.2 million.

As of September 30, 2024, we have raised a total of $1.0 billion to fund our operations, comprised primarily of gross proceeds from our IPO, underwritten offerings, a private placement of our common stock and the sale and issuance of convertible preferred stock.

As of September 30, 2024, we had cash, cash equivalents and marketable securities of $463.3 million.

We have incurred significant operating losses since inception.

Our net losses were $63.2 million and $31.8 million for the three months ended June 30, 2024 and 2023, respectively, and $98.2 million and $65.0 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, we had an accumulated deficit of $704.2 million.

Our net losses were $31.2 million and $30.4 million for the three months ended September 30, 2024 and 2023, respectively, and $129.4 million and $95.3 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, we had an accumulated deficit of $735.4 million.

We expect our expenses and operating losses will increase substantially for the foreseeable future, particularly if and as we conduct our ongoing and planned clinical trials and preclinical studies;

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and incur additional costs associated with being a public company.

obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution.

If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution.

In addition, as our product candidates progress through development and toward commercialization, we will need to make milestone payments to the licensors and other third parties from whom we have in-licensed or acquired our product candidates.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and preclinical studies and our expenditures on other research and development activities.

Based upon our current operating plans, we believe that our cash, cash equivalents and marketable securities as of June 30, 2024 will be sufficient to fund our operations into the first half of 2027.

Based upon our current operating plans, we believe that our cash, cash equivalents and marketable securities as of September 30, 2024 will be sufficient to fund our operations into the first half of 2027.

We do not expect to generate any revenues from product sales until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years and may never occur.

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Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as geopolitical and economic events.

We do not believe that such factors had a material adverse impact on our results of operations during the three months ended June 30, 2024.

We do not believe that such factors had a material adverse impact on our results of operations during the three months ended September 30, 2024.

Our acquisition and license agreements

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We have the right to sublicense (through multiple tiers) our rights under the Joyo License Agreement, subject to certain limitations and conditions, and are required to use commercially reasonable efforts to commercialize licensed products in the United States.

The license granted under the Joyo License Agreement is subject to Joyo’ reserved right to develop, manufacture, use, and commercialize licensed products in mainland China, Hong Kong and Macau, unless we exercise our option to expand the license to include mainland China, Hong Kong and Macau.

The license granted under the Joyo License Agreement is subject to Joyo’s reserved right to develop, manufacture, use, and commercialize licensed products in mainland China, Hong Kong and Macau, unless we exercise our option to expand the license to include mainland China, Hong Kong and Macau.

Under the Joyo License Agreement, we made an upfront cash payment to Joyo of $12.5 million.

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The Medshine License Agreement may be terminated in its entirety by either party in the event of an uncured material breach by the other party or in the event the other party becomes subject to specified bankruptcy, insolvency, or similar circumstances.

Medshine may terminate the Medshine License Agreement in the event that we or our affiliates or any of our or their sublicensees commences or actively and voluntarily participates in any challenge to the licensed patents.

Medshine may terminate the Medshine License Agreement in the event that we or our affiliates or any of our or their

sublicensees commences or actively and voluntarily participates in any challenge to the licensed patents.

We may terminate the Medshine License Agreement in its entirety at any time upon the provision of prior written notice to Medshine.

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The following table summarizes our research and development expenses incurred for the following periods (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Other clinical programs

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Results of operations

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

The following table summarizes our results of operations for the three months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended June 30,

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

The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,

Operating expenses:

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Research and development expenses

Research and development expenses were $33.0 million for the three months ended June 30, 2024 compared to $26.2 million for the three months ended June 30, 2023.

The increase of $6.8 million was primarily driven by an impairment charge of $3.0 million on operating lease assets, leasehold improvements, and furniture related to the sublease plan of the first floor of our San Diego facility during the three months ended June 30, 2024, and increases of $1.2 million in expenses incurred in connection with clinical trials, preclinical studies and discovery activities, $1.0 million in personnel costs primarily due to termination benefits in connection with the reduction in force, $0.7 million in facilities-related expenses and depreciation, and $0.7 million in outsourced services and consulting fees.

Research and development expenses were $27.6 million for the three months ended September 30, 2024 compared to $25.2 million for the three months ended September 30, 2023.

The increase of $2.4 million was primarily driven by an increase of $4.5 million in expenses incurred in connection with clinical trials, preclinical studies and discovery activities, partially offset by decreases of $1.5 million in personnel costs, including stock-based compensation expense, and $0.4 million in outsourced services and consulting fees.

In-process research and development expenses

In-process research and development expenses were $22.5 million for the three months ended June 30, 2024 compared to $0 for the three months ended June 30, 2023.

The increase was driven by upfront payments of $22.5 million in connection with our license agreements with Joyo and Medshine.

We recorded no in-process research and development expenses for each of the three months ended September 30, 2024 and 2023.

General and administrative expenses

General and administrative expenses were $12.3 million for the three months ended June 30, 2024 compared to $9.8 million for the three months ended June 30, 2023.

The increase of $2.5 million was primarily driven by an impairment charge of $1.7 million on operating lease assets, leasehold improvements, and furniture related to the sublease plan of the first floor of our San Diego facility during the three months ended June 30, 2024, and an increase of $0.7 million in legal fees.

General and administrative expenses were $9.6 million for the three months ended September 30, 2024 compared to $9.4 million for the three months ended September 30, 2023.

The increase of $0.2 million was primarily driven by an increase of $0.5 million in stock-based compensation expense, partially offset by a decrease in personnel costs of $0.2 million.

Other income (expense), net

Other income (expense), net was $4.6 million for the three months ended June 30, 2024 compared to $4.2 million for the three months ended June 30, 2023.

The increase of $0.4 million was primarily related to an increase in interest earned on our cash, cash equivalents and marketable securities of $0.8 million, partially offset by a $0.4 million impairment charge on our investment in equity securities during the three months ended June 30, 2024.

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

The following table summarizes our results of operations for the six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended June 30,

Other income (expense), net was $6.0 million for the three months ended September 30, 2024 compared to $4.3 million for the three months ended September 30, 2023.

The increase of $1.7 million was primarily related to an increase in interest earned on our cash, cash equivalents and marketable securities during the three months ended September 30, 2024.

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

The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

Operating expenses:

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Research and development expenses

Research and development expenses were $61.6 million for the six months ended June 30, 2024 compared to $53.8 million for the six months ended June 30, 2023.

The increase of $7.8 million was primarily driven by a $3.7 million increase in expenses incurred in connection with clinical trials, preclinical studies and discovery activities, an impairment charge of $3.0 million on operating lease assets, leasehold improvements, and furniture related to the sublease plan of the first floor of our San Diego facility during the three months ended June 30, 2024, and a $1.1 million increase in personnel costs primarily due to termination benefits in connection with the reduction in force.

Research and development expenses were $89.2 million for the nine months ended September 30, 2024 compared to $79.0 million for the nine months ended September 30, 2023.

The increase of $10.2 million was primarily driven by an increase of $8.1 million in expenses incurred in connection with clinical trials, preclinical studies and discovery activities and an impairment charge of $3.0 million on operating lease assets, leasehold improvements, and furniture related to the sublease of the first floor of our San Diego facility during the nine months ended September 30, 2024, partially offset by a $0.7 million decrease in outsourced services and consulting fees.

In-process research and development expenses

In-process research and development expenses were $22.5 million for the six months ended June 30, 2024 compared to $0 for the six months ended June 30, 2023.

The increase was driven by upfront payments of $22.5 million in connection with our license agreements with Joyo and Medshine.

In-process research and development expenses were $22.5 million for the nine months ended September 30, 2024 compared to $0 for the nine months ended September 30, 2023.

The increase was driven by upfront payments of $22.5 million in connection with our license agreements with Joyo and Medshine during the nine months ended September 30, 2024.

General and administrative expenses

General and administrative expenses were $22.5 million for the six months ended June 30, 2024 compared to $19.2 million for the six months ended June 30, 2023.

The increase of $3.3 million was primarily driven by an impairment charge of $1.7 million on operating lease assets, leasehold improvements, and furniture related to the sublease plan of the first floor of our San Diego facility during the three months ended June 30, 2024, increases of $1.4 million in legal fees and $1.0 million in personnel related costs, including stock-based compensation, partially offset by a decrease of $0.6 million in insurance costs.

General and administrative expenses were $32.1 million for the nine months ended September 30, 2024 compared to $28.6 million for the nine months ended September 30, 2023.

The increase of $3.5 million was primarily driven by an impairment charge of $1.7 million on operating lease assets, leasehold improvements, and furniture related to the sublease of the first floor of our San Diego facility during the nine months ended September 30, 2024, and increases of $1.4 million in legal fees and $1.1 million in stock-based compensation expense, partially offset by a decrease of $0.7 million in insurance costs.

Other income (expense), net

Other income (expense), net was $8.4 million for the six months ended June 30, 2024 compared to $8.0 million for the six months ended June 30, 2023.

Other income (expense), net was $14.5 million for the nine months ended September 30, 2024 compared to $12.3 million for the nine months ended September 30, 2023.

The increase of $2.1 million was primarily related to an increase in interest earned on our cash, cash equivalents and marketable securities of $2.3 million, partially offset by a $0.4 million impairment charge on our investment in equity securities during the nine months ended September 30, 2024.

Liquidity and capital resources

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Pursuant to the Sale Agreement, the Agent will receive a commission from us of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sale Agreement.

There have been no shares of our common stock sold under the Sale Agreement as of June 30, 2024.

In July 2024, we sold 9,231,114 shares of common stock under the Sale Agreement at a price of $2.37 per share.

Proceeds from the ATM Offering in July 2024 were $21.1 million, net of commissions and expenses of $0.8 million.

During the three months ended September 30, 2024, we sold 9,231,114 shares of common stock under the Sale Agreement at a weighted-average price of $2.37 per share.

Proceeds from the ATM Offering during the three months ended September 30, 2024 were $21.0 million, net of commissions and expenses of $0.8 million.

In December 2022, we completed the 2022 Offering and issued 15,384,616 shares of our common stock at a price to the public of $6.50 per share.

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Future capital requirements

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $460.2 million.

As of September 30, 2024, we had cash, cash equivalents and marketable securities of $463.3 million.

Based upon our current operating plans, we believe that our cash, cash equivalents and marketable securities will be sufficient to fund our operations into the first half of 2027.

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The following table shows a summary of our cash flows for the periods presented (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash (used in) provided by:

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Financing activities

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

Net decrease in cash, cash equivalents and restricted cash

Operating activities

Cash used in operating activities was $62.4 million during the six months ended June 30, 2024, primarily resulting from a net loss of $98.2 million, accretion on marketable securities of $4.7 million and changes in operating assets and liabilities of $3.2 million, partially reduced by in-process research and development expenses of $22.5 million in connection with our license agreements with Joyo and Medshine, which are reflected in investing activities, stock-based compensation expense of $14.0 million, an impairment charge of $4.7 million on operating lease assets, leasehold improvements and furniture and depreciation and amortization expense of $2.1 million.

Cash used in operating activities was $52.3 million during the six months ended June 30, 2023, primarily resulting from a net loss of $65.0 million, accretion on marketable securities of $2.4 million, and changes in operating assets and liabilities of $0.6 million, partially reduced by stock-based compensation expense of $13.9 million and depreciation and amortization expense of $1.8 million.

Net cash used from changes in operating assets and liabilities consisted primarily of a decrease in accounts payable, accrued expenses and other current and long-term liabilities of $5.9 million, partially offset by an increase in operating lease assets and liabilities, net of $3.5 million primarily due to the receipt of $2.3 million in reimbursement from our landlord for tenant improvements, and a decrease in prepaid expenses and other current and long-term assets of $1.8 million.

Cash used in operating activities was $84.9 million during the nine months ended September 30, 2024, primarily resulting from a net loss of $129.4 million and accretion on marketable securities of $7.2 million, partially reduced by in-process research and development expenses of $22.5 million in connection with our license agreements with Joyo and Medshine, which are reflected in investing activities, stock-based compensation expense of $20.7 million, an impairment charge of $4.7 million on operating lease assets, leasehold improvements and furniture, depreciation and amortization expense of $3.0 million, and changes in operating assets and liabilities of $0.6 million.

Net cash provided by changes in operating assets and liabilities consisted primarily of an increase in accounts payable, accrued expenses and other current and long-term liabilities of $3.6 million, partially offset by an increase in prepaid expenses and other current and long-term assets of $2.6 million.

Cash used in operating activities was $76.4 million during the nine months ended September 30, 2023, primarily resulting from a net loss of $95.3 million and accretion on marketable securities of $4.8 million, partially reduced by stock-based compensation expense of $20.1 million, depreciation and amortization expense of $2.8 million, and changes in operating assets and liabilities of $0.8 million.

Net cash provided by changes in operating assets and liabilities consisted primarily of an increase in operating lease assets and liabilities, net of $3.3 million primarily due to the receipt of $2.3 million in reimbursement from our landlord for tenant improvements, and an increase in accounts payable of $0.8 million, partially offset by a decrease in accrued expenses and other current and long-term liabilities of $3.3 million.

Investing activities

Net cash used in investing activities was $76.6 million during the six months ended June 30, 2024 as compared to $94.0 million during the six months ended June 30, 2023.

The decrease in cash used in investing activities of $17.3 million was primarily the result of decreases in purchases of marketable securities of $55.1 million and property and equipment of $1.4 million, partially offset by a decrease in maturities of marketable securities of $36.7 million and an increase in in-process research and development of $2.5 million.

Net cash used in investing activities was $179.2 million during the nine months ended September 30, 2024 as compared to $95.8 million during the nine months ended September 30, 2023.

The increase in cash used in investing activities of $83.5 million was primarily the result of increases in purchases of marketable securities of $82.8 million and in-process research and development of $2.5 million, partially offset by a decrease in purchases of property and equipment of $1.6 million.

Financing activities

Net cash provided by financing activities was $218.8 million during the six months ended June 30, 2024 as compared to $0.8 million during the six months ended June 30, 2023.

During the six months ended June 30, 2024, we received $174.6 million of net proceeds for the issuance of common stock from the 2024 Offering, $43.6 million in net proceeds for the issuance of common stock from the 2024 Private Placement, $0.4 million from the issuance of common stock under our Employee Stock Purchase Plan (ESPP) and $0.1 million from the exercise of stock options.

During the six months ended June 30, 2023, we received $0.5 million from the issuance of common stock under our ESPP and $0.3 million from the exercise of stock options.

Net cash provided by financing activities was $239.9 million during the nine months ended September 30, 2024 as compared to $0.8 million during the nine months ended September 30, 2023.

During the nine months ended September 30, 2024, we received $174.4 million of net proceeds for the issuance of common stock from the 2024 Offering, $43.6 million in net proceeds for the issuance of common stock from the 2024 Private Placement, $21.0 million in net proceeds for the issuance of common stock from the ATM offering, $0.4 million from the issuance of common stock under our Employee Stock Purchase Plan (ESPP) and $0.4 million from the exercise of stock options.

During the nine months ended September 30, 2023, we received $0.5 million from the issuance of common stock under our ESPP and $0.3 million from the exercise of stock options.

Contractual obligations and commitments

As of June 30, 2024, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in “Management’s discussion and analysis of financial condition and results of operations – Cash requirements due to contractual obligations and other commitments,” included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 27, 2024.

As of September 30, 2024, there have been no material changes outside the ordinary course of our business to the contractual obligations we reported in “Management’s discussion and analysis of financial condition and results of operations – Cash requirements due to contractual obligations and other commitments,” included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 27, 2024.

Critical accounting policies and estimates

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Actual results may differ materially from these estimates.

As of June 30, 2024, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s discussion and analysis of financial condition and results of operations – Critical accounting policies and estimates,” included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 27, 2024.

As of September 30, 2024, there have been no material changes to our critical accounting policies and estimates from those disclosed in “Management’s discussion and analysis of financial condition and results of operations – Critical accounting policies and estimates,” included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 27, 2024.

Recently issued and adopted accounting pronouncements

13 unchanged sentences

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