What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-10 · 94 added, 84 removed, 287 unchanged (38% of the section changed)

7 unchanged sentences

We have identified drug targets to treat the root causes of facioscapulohumeral muscular dystrophy, or FSHD, and certain hemoglobinopathies, namely sickle cell disease, or SCD, and ß-thalassemia.

Losmapimod for FSHD

In August 2019, we initiated a Phase 2b clinical trial, or the ReDUX4 trial, and a Phase 2 open label clinical trial of losmapimod, our product candidate for FSHD, to evaluate the efficacy and safety of losmapimod in addressing the underlying cause of FSHD.

2 unchanged sentences

We plan to meet with health authorities, including the U.S.

Food and Drug Administration, or FDA, in the second half of 2021 to determine the regulatory path for losmapimod in FSHD.

Food and Drug Administration, or FDA, by year-end 2021 and plan to provide an update on losmapimod in the first quarter of 2022.

As a result of the COVID-19 pandemic, we announced in May 2020 that the ReDUX4 trial had been extended from 24 to 48 weeks to ensure the safety of participants during the pandemic.

11 unchanged sentences

We will continue to analyze data from each endpoint to determine their viability for future trials.

FTX-6058 for SCD and ß-thalassemia

In the fourth quarter of 2020, we initiated a Phase 1 clinical trial of FTX-6058, our product candidate for certain hemoglobinopathies, namely SCD and beta-thalassemia, which is a novel upregulator of fetal hemoglobin.

The trial is an ongoing, randomized, double-blind, placebo-controlled trial designed to evaluate the safety, tolerability and pharmacokinetics of FTX-6058 in healthy adult volunteers.

In August 2021, we reported interim data from the cohorts completed to date in the single ascending dose, or SAD, portion of the trial and the multiple ascending dose, or MAD, portion of the trial.

The trial is an ongoing, randomized, double-blind, placebo-controlled trial designed to evaluate the safety, tolerability and pharmacokinetics of FTX-6058 in healthy adult volunteers and patients with SCD.

In August 2021, we reported interim data from the initial healthy volunteer cohorts completed in the single ascending dose, or SAD, portion of the trial and the multiple ascending dose, or MAD, portion of the trial.

In the SAD portion of the trial, healthy volunteers received a single oral dose of either placebo or 2, 4, 10, 20, 30 or 40 mg of FTX-6058.

9 unchanged sentences

Pharmacodynamic parameters assessed include changes in HBG mRNA, or HBG1/2 mRNA which encodes for γ-globin, a component of fetal hemoglobin, and changes in F-reticulocytes, which are immature red blood cells that contain fetal hemoglobin, or HbF.

FTX-6058 has been generally well tolerated in all cohorts completed to date.

FTX-6058 was generally well-tolerated in all cohorts completed.

There were no serious adverse events reported and no discontinuations.

2 unchanged sentences

No clinically significant changes in safety-related laboratory tests were reported during treatment periods for any of the FTX-6058 dose cohorts included in the analysis.

Results from the MAD cohorts showed maximal target engagement as evidenced by 70% – 80% reduction in baseline H3K27me3 levels, which we believe represents proof of mechanism.

The interim data reported from the MAD cohorts in August 2021 showed maximal target engagement as evidenced by 70% – 80% reduction in baseline H3K27me3 levels, which we believe represents proof of mechanism.

The 10 mg dose showed a mean 4.5-fold induction in HBG mRNA at day 14 and mean 4.2-fold increases in F-reticulocytes at the safety follow-up, indicating increased HbF protein expression, which we believe represents proof of biology.

6 unchanged sentences

F-Reticulocyte Mean Fold Increase for FTX-6058 Versus Placebo

We anticipate presenting additional data from all Phase 1 dose cohorts at an upcoming medical meeting in the fourth quarter of 2021, pending abstract acceptance.

Based on the interim data, we anticipate initiating enrollment in a Phase 1b clinical trial in sickle cell patients in the fourth quarter of 2021.

We anticipate presenting additional data from the Phase 1 clinical trial by year-end 2021, including data from healthy volunteers who received an oral dose of placebo, 20 or 30 mg of FTX-6058 daily for 14 consecutive days.

Additionally, we have added a cohort

of sickle cell disease patients to the Phase 1 clinical trial to further inform our pharmacokinetics/pharmacodynamic modeling and our dose selection for future development.

Based on the interim data, we anticipate initiating enrollment in a Phase 1b clinical trial in sickle cell patients by year-end 2021.

The trial will be an open-label, multi-dose trial starting at 6 mg once-daily dosing and will include a treatment period of up to three months.

This trial will aim to demonstrate the safety, tolerability and pharmacokinetics/pharmacodynamic effects of FTX-6058 in people living with SCD (including induction of HbF protein).

This trial could provide the opportunity to demonstrate HbF protein induction in people living with SCD and will be used to help inform a potential Phase 2/3 trial, which we anticipate

initiating in 2023 .

These interim data also support the initiation of a clinical trial in non-SCD hemoglobinopathies (e.g., beta-thalassemia) for which we plan to submit an IND by year-end 2021.

We anticipate initiating a clini cal trial in non-SCD hemoglobinopathies in 2022.

We plan to report initial data from the Phase 1b clinical trial in sickle cell patients in the second quarter of 2022.

This trial could provide an opportunity to demonstrate HbF protein induction in people living with SCD and will be used to help inform a potential Phase 2/3 trial, which we anticipate initiating in 2023.

These interim data presented in August 2021 also support the initiation of a clinical trial in non-SCD hemoglobinopathies, including beta-thalassemia, for which we plan to submit an IND by year-end 2021.

We anticipate initiating a clinical trial in non-SCD hemoglobinopathies in 2022.

Financial Overview

Since inception, our operations have focused on organizing and staffing our company, business planning, raising capital, establishing our intellectual property, building our discovery platform, including our proprietary compound library and product engine, identifying drug targets and potential product candidates, in-licensing assets, producing drug substance and drug product material for use in clinical trials and conducting preclinical studies and clinical trials.

2 unchanged sentences

The net proceeds of the offering were $47.4 million, after deducting underwriting discounts and commissions and offering expenses.

In August 2021, we issued and sold 7,590,000 shares of our common stock in a public offering at a public offering price of $19.00 per share, which includes 990,000 shares issued upon the exercise in full by the underwriters of their option to purchase additional shares at the public offering price, less underwriting discounts and commissions.

The net proceeds of the offering were $135.5 million, after deducting underwriting discounts and commissions and offering expenses.

We have incurred significant operating losses since our inception and we expect to continue to incur significant operating losses for the foreseeable future.

Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend heavily on the successful development and eventual commercialization of one or more of our product candidates.

Our net losses were $19.6 million and $36.6 million for the three and six months ended June 30, 2021, respectively, and $15.7 million and $34.1 million for the three and six months ended June 30, 2020, respectively.

As of June 30, 2021, we had an accumulated deficit of $258.3 million.

Our net losses were $20.7 million and $57.4 million for the three and nine months ended September 30, 2021, respectively, and $19.0 million and $53.1 million for the three and nine months ended September 30, 2020, respectively.

As of September 30, 2021, we had an accumulated deficit of $279.0 million.

We expect our expenses and operating losses will increase substantially over the next several years in connection with our ongoing activities, as we:

continue our clinical development of losmapimod, including our ongoing open label extension of our Phase 2b clinical trial for the treatment of FSHD and our ongoing Phase 2 open label clinical trial for the treatment of FSHD;

continue our clinical development of FTX-6058, including our ongoing Phase 1 clinical trial in healthy adult volunteers and our planned Phase 1b clinical trial of FTX-6058 in patients with SCD;

continue our clinical development of FTX-6058, including our ongoing Phase 1 clinical trial in healthy adult volunteers and patients with SCD and our planned Phase 1b clinical trial of FTX-6058 in patients with SCD;

continue our ongoing preclinical studies;

advance clinical-stage product candidates into later stage trials;

pursue the discovery of drug targets for other rare diseases and the subsequent development of any resulting product candidates;

pursue the discovery of drug targets for other genetically defined rare diseases and the subsequent development of any resulting product candidates;

seek regulatory approvals for any product candidates that successfully complete clinical trials;

13 unchanged sentences

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 June 30, 2021, we had $125.6 million in cash, cash equivalents, and marketable securities.

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

As of September 30, 2021, we had $240.3 million in cash, cash equivalents, and marketable securities.

We believe that our existing cash, cash equivalents, and marketable securities as of September 30, 2021 will enable us to fund our operating expenses and capital expenditure requirements into 2024.

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.

11 unchanged sentences

We are also eligible to receive up to $436.5 million in the aggregate in milestone payments with respect to certain research, developmental, clinical, regulatory and sales-related milestones, and tiered royalty payments based on Acceleron’s (and any of its affiliates’ and sublicensees’) annual worldwide net sales of products directed to any identified targets.

For the three and six months ended June 30, 2021 , we recognized $2.3 million and $ 4.9 million, respectively, of collaboration revenue under the Acceleron Collaboration Agreement .

For the three and six months ended June 30, 2020 , we recognized $ 2.0 million and $2.8 million, respectively, of collaboration revenue under the Acceleron Collaboration Agreement .

As of June 30, 2021 and December 31, 2020 , we have recorded $ 4.0 million and $7.9 million, respectively, of deferred revenue associated with the Acceleron Collaboration Agreement, which is classified as either current or net of current portion in our consolidated balance sheets based on the period over which the revenue is expected to be recognized.

As of June 30, 2021 , we had received $ 2.

7 million of cost reimbursement payments , $2.0 million of milestone payments, and no royalty payments under the Acceleron Collaboration Agreement.

As of June 30, 2021 , we recorded unbilled accounts receivable of $0.6 million related to reimbursable research and development costs under the Acceleron Collaboration Agreement for activities performed during the three months ended June 30, 2021 .

For the three and nine months ended September 30, 2021, we recognized $2.9 million and $7.8 million, respectively, of collaboration revenue under the Acceleron Collaboration Agreement.

For the three and nine months ended September 30, 2020, we recognized $1.5 million and $4.3 million, respectively, of collaboration revenue under the Acceleron Collaboration Agreement.

As of September 30, 2021 and December 31, 2020, we have recorded $1.8 million and $7.9 million, respectively, of deferred revenue associated with the Acceleron Collaboration Agreement, which is classified as either current or net of current portion in our consolidated balance sheets based on the period over which the revenue is expected to be recognized.

As of September 30, 2021, we had received $3.3 million of cost reimbursement payments, $2.0 million of milestone payments, and no royalty payments under the Acceleron Collaboration Agreement.

As of September 30, 2021, we recorded unbilled accounts receivable of $0.6 million related to reimbursable research and development costs under the Acceleron Collaboration Agreement for activities performed during the three months ended September 30, 2021.

In the future, we will recognize additional revenue associated with the $10.0 million upfront payment and the $2.0 million of specified research milestones achieved in December 2020 as we satisfy our performance obligation, and from reimbursement of costs incurred under the Acceleron Collaboration Agreement .

9 unchanged sentences

The royalties are payable on a product-by-product basis during a specified royalty term, and may be reduced in specified circumstances.

For the three and six months ended June 30, 2021, we recognized $2.0 million and $4.2 million, respectively, of collaboration revenue under the MyoKardia Collaboration Agreement.

For the three and six months ended June 30, 2020, we did not recognize any collaboration revenue in connection with this arrangement as we had not yet entered into the MyoKardia Collaboration Agreement.

As of June 30, 2021 and December 31, 2020, we have recorded $5.9 million and $10.0 million, respectively, of deferred revenue associated with the MyoKardia Collaboration Agreement, which is classified as either current or net of current portion in our consolidated balance sheets based on the period over which the revenue is expected to be recognized.

As of June 30, 2021, we had received no cost reimbursement payments and no milestone or royalty payments under the MyoKardia Collaboration Agreement, other than the $2.5 million payment as prepaid research funding in July 2020.

As of June 30, 2021, we recorded unbilled accounts receivable of $0.1 million related to reimbursable research and development costs under the MyoKardia Collaboration Agreement for activities performed during the three months ended June 30, 2021.

For the three and nine months ended September 30, 2021, we recognized $2.1 million and $6.3 million, respectively, of collaboration revenue under the MyoKardia Collaboration Agreement.

For the three and nine months ended September 30, 2020, we recognized $0.3 million of collaboration revenue under the MyoKardia Collaboration Agreement.

As of September 30, 2021 and December 31, 2020, we have recorded $4.4 million and $10.0 million, respectively, of deferred revenue associated with the MyoKardia Collaboration Agreement, which is classified as either current or net of current portion in our consolidated balance sheets based on the period over which the revenue is expected to be recognized.

As of September 30, 2021, we had received $2.6 million in cost reimbursement payments, including the $2.5 million payment as prepaid research funding in July 2020, and no milestone or royalty payments under the MyoKardia Collaboration Agreement.

As of September 30, 2021, we recorded unbilled accounts receivable of $0.6 million related to reimbursable research and development costs under the MyoKardia Collaboration Agreement for activities performed during the three months ended September 30, 2021.

In the future, we will recognize additional revenue associated with the $10.0 million upfront payment as we satisfy our performance obligation, and from reimbursement of costs incurred under the MyoKardia Collaboration Agreement.

18 unchanged sentences

We do not track our internal research and development expenses on a program-by-program basis as the resources are deployed across multiple projects.

The following table summarizes our external research and development expenses by program following nomination as a development candidate for the three and six months ended June 30, 2021 and 2020.

The following table summarizes our external research and development expenses by program following nomination as a development candidate for the three and nine months ended September 30, 2021 and 2020.

Pre-development candidate expenses, unallocated expenses and internal research and development expenses are classified separately.

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands)

40 unchanged sentences

Results of Operations

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

The following summarizes our results of operations for the three months ended June 30, 2021 and 2020, along with the changes in those items in dollars:

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

The following summarizes our results of operations for the three months ended September 30, 2021 and 2020, along with the changes in those items in dollars:

Three Months Ended

September 30,

(in thousands)

7 unchanged sentences

Collaboration Revenue

Collaboration revenue increased by $2.4 million from $2.0 million for the three months ended June 30, 2020 to $4.4 million for the three months ended June 30, 2021.

Collaboration revenue increased by $3.1 million from $1.8 million for the three months ended September 30, 2020 to $4.9 million for the three months ended September 30, 2021.

We recognize revenue under each of the Acceleron Collaboration Agreement and MyoKardia Collaboration Agreement based on our pattern of performance related to the respective identified performance obligation, which is the period over which we will perform research services under each of the Acceleron Collaboration Agreement and MyoKardia Collaboration Agreement.

For the three months ended June 30, 2021 and 2020, we recognized $2.3 million and $2.0 million of collaboration revenue under the Acceleron Collaboration Agreement, respectively.

For the three months ended June 30, 2021, we recognized $2.1 million of collaboration revenue under the MyoKardia Collaboration Agreement.

For the three months ended June 30, 2020, we did not recognize any collaboration revenue under the MyoKardia Collaboration Agreement as it had not yet been executed.

For the three months ended September 30, 2021 and 2020, we recognized $2.9 million and $1.5 million of collaboration revenue under the Acceleron Collaboration Agreement, respectively.

For the three months ended September 30, 2021 and 2020, we recognized $2.1 million and $0.3 million of collaboration revenue under the MyoKardia Collaboration Agreement.

Research and Development Expenses

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

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

Three Months Ended

September 30,

(in thousands)

4 unchanged sentences

Total research and development expenses

Research and development expense increased by $4.6 million from $12.8 million for the three months ended June 30, 2020 to $17.4 million for the three months ended June 30, 2021.

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

$4.0 million in increased external research and development costs, primarily relating to our ongoing open label extension of our Phase 2b clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 2 open label clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 1 clinical trial of FTX-6058 in healthy adult volunteers and our planned Phase 1b clinical trial of FTX-6058 in patients with SCD;

$0.3 million in increased employee compensation costs, primarily due to increased research and development headcount;

$0.2 million in facilities costs;

$0.2 million in increased laboratory supplies costs, partially offset by less than a $0.1 million decrease in other costs.

Research and development expense increased by $1.4 million from $15.6 million for the three months ended September 30, 2020 to $17.1 million for the three months ended September 30, 2021.

The increase in research and development expense was primarily attributable to $1.5 million in increased employee compensation costs, which was primarily due to increased research and development headcount.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the three months ended June 30, 2021:

The following table summarizes our general and administrative expenses for the three months ended September 30, 2021:

Three Months Ended

September 30,

(in thousands)

3 unchanged sentences

Total general and administrative expenses

General and administrative expenses increased by $1.6 million from $5.1 million for the three months ended June 30, 2020 to $6.7 million for the three months ended June 30, 2021.

General and administrative expenses increased by $3.3 million from $5.3 million for the three months ended September 30, 2020 to $8.6 million for the three months ended September 30, 2021.

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

$2.0 million in increased professional services costs, primarily due to increased use of consulting services;

$1.3 million in increased employee compensation costs, including stock-based compensation expense, primarily due to increased general and administrative headcount to support the growth of our organization;

$0.7 million in increased professional services costs;

$0.2 million in other costs.

less than $0.1 million in other costs.

Other Income, Net

Other income, net decreased by $0.2 million from $0.2 million for the three months ended June 30, 2020 to less than $0.1 million for the three months ended June 30, 2021.

Other income, net decreased by $0.1 million from $0.1 million for the three months ended September 30, 2020 to less than $0.1 million for the three months ended September 30, 2021.

The decrease in other income, net was primarily attributable to a decrease in investment income on our cash, cash equivalents, and marketable securities as a result of an overall decreased rate of return.

Comparison of the Six Months Ended June 30, 2021

The following summarizes our results of operations for the six months ended June 30, 2021, along with the changes in those items in dollars:

Six Months Ended

Comparison of the Nine Months Ended September 30, 2021

The following summarizes our results of operations for the nine months ended September 30, 2021, along with the changes in those items in dollars:

Nine Months Ended

September 30,

(in thousands)

7 unchanged sentences

Collaboration Revenue

Collaboration revenue increased by $6.4 million from $2.8 million for the six months ended June 30, 2020 to $9.2 million for the six months ended June 30, 2021.

For the six months ended June 30, 2021 and 2020, we recognized $4.9 million and $2.8 million of collaboration revenue under the Acceleron Collaboration Agreement, respectively.

For the six months ended June 30, 2021, we

recognized $ 4.2 million of collaboration revenue under the MyoKardia Collaboration Agreement .

For the six months ended June 30, 2020 , we did not recognize any collaboration revenue under the MyoKardia Collaboration Agreement as it had not yet been executed .

Collaboration revenue increased by $9.5 million from $4.6 million for the nine months ended September 30, 2020 to $14.1 million for the nine months ended September 30, 2021.

We recognize revenue under each of the Acceleron Collaboration Agreement

and MyoKardia Collaboration Agreement based on our pattern of performance related to the respective identified performance obligation, which is the period over which we will perform research services under each of the Acceleron Collaboration Agreement and MyoKardia Collaboration Agreement .

For the nine months ended September 30, 2021 and 2020 , we recognized $ 7.8 million and $ 4.3 million of collaboration revenue under the Acceleron Collaboration Agreement , respectively .

For the nine months ended September 30, 2021 and 2020 , we recognized $ 6.3 million and $0.3 million of collaboration revenue under the MyoKardia Collaboration Agreement , respectively .

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2021:

Six Months Ended

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

Nine Months Ended

September 30,

(in thousands)

4 unchanged sentences

Total research and development expenses

Research and development expense increased by $6.5 million from $27.3 million for the six months ended June 30, 2020 to $33.7 million for the six months ended June 30, 2021.

Research and development expense increased by $7.9 million from $42.9 million for the nine months ended September 30, 2020 to $50.8 million for the nine months ended September 30, 2021.

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

$5.7 million in increased external research and development costs, primarily relating to our ongoing open label extension of our Phase 2b clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 2 open label clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 1 clinical trial of FTX-6058 in healthy adult volunteers and our planned Phase 1b clinical trial of FTX-6058 in patients with SCD;

$0.6 million in increased laboratory supplies costs;

$5.9 million in increased external research and development costs, primarily relating to our ongoing open label extension of our Phase 2b clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 2 open label clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 1 clinical trial of FTX-6058 in healthy adult volunteers and patients with SCD and our planned Phase 1b clinical trial of FTX-6058 in patients with SCD;

$1.8 million in increased employee compensation costs, primarily due to increased research and development headcount;

$0.3 million in increased laboratory supplies costs;

$0.2 million in increased facilities costs, partially offset by a $0.2 million decrease in other costs.

General and Administrative Expenses

The following table summarizes our general and administrative expenses for the six months ended June 30, 2021:

Six Months Ended

The following table summarizes our general and administrative expenses for the nine months ended September 30, 2021:

Nine Months Ended

September 30,

(in thousands)

3 unchanged sentences

Total general and administrative expenses

General and administrative expenses increased by $2.0 million from $10.2 million for the six months ended June 30, 2020 to $12.2 million for the six months ended June 30, 2021.

General and administrative expenses increased by $5.3 million from $15.5 million for the nine months ended September 30, 2020 to $20.8 million for the nine months ended September 30, 2021.

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

$2.3 million in increased employee compensation costs, including stock-based compensation expense, primarily due to increased general and administrative headcount to support the growth of our organization;

$0.8 million in increased professional services costs;

$2.8 million in increased professional services costs, primarily due to increased use of consulting services;

$0.3 million in other costs.

Other Income, Net

Other income, net decreased by $0.5 million from $0.6 million for the six months ended June 30, 2020 to less than $0.1 million for the six months ended June 30, 2021.

Other income, net decreased by $0.6 million from $0.7 million for the nine months ended September 30, 2020 to $0.1 million for the nine months ended September 30, 2021.

3 unchanged sentences

We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all.

As of June 30, 2021, we have funded our operations primarily with aggregate gross proceeds of $357.0 million from the sale of shares of our common stock in public offerings, a private placement, and the ATM Offering, through issuances of convertible preferred stock, and from upfront payments received under our collaboration and license agreements.

As of June 30, 2021, we had cash, cash equivalents, and marketable securities of $125.6 million.

On July 22, 2019, we completed an IPO of our common stock and issued and sold 4,500,000 shares of common stock at a public offering price of $16.00 per share, resulting in net proceeds of $63.9 million after deducting underwriting discounts and commissions and offering expenses.

As of September 30, 2021, we have funded our operations primarily with aggregate gross proceeds of $501.2 million from the sale of shares of our common stock in public offerings, a private placement, and the ATM Offering, through issuances of convertible preferred stock, and from upfront payments received under our collaboration and license agreements.

As of September 30, 2021, we had cash, cash equivalents, and marketable securities of $240.3 million.

On July 22, 2019, we completed an initial public offering of our common stock and issued and sold 4,500,000 shares of common stock at a public offering price of $16.00 per share, resulting in net proceeds of $63.9 million after deducting underwriting discounts and commissions and offering expenses.

On June 9, 2020, we issued and sold 4,029,411 shares of common stock in a private placement at a price of $17.00 per share, resulting in net proceeds of $64.2 million, after deducting offering costs.

4 unchanged sentences

In connection with the filing of the Shelf Registration Statement, we entered into an Equity Distribution Agreement with Piper Sandler & Co., or Piper Sandler, as sales agent, pursuant to which we may offer and sell shares of our common stock with an aggregate offering price of up to $75.0 million under the ATM Offering.

As of June 30, 2021, we have issued and sold 550,000 shares of common stock under the ATM Offering, resulting in net proceeds of $5.7 million after deducting offering costs.

As of September 30, 2021, we have issued and sold 550,000 shares of common stock under the ATM Offering, resulting in net proceeds of $5.7 million after deducting offering costs.

On January 22, 2021, we completed a public offering of our common stock and issued and sold 4,600,000 shares of common stock at a public offering price of $11.00 per share, resulting in net proceeds of $47.4 million after deducting underwriting discounts and commissions and offering expenses.

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

Six Months Ended

On August 16, 2021, we completed a public offering of our common stock and issued and sold 7,590,000 shares of common stock at a public offering price of $19.00 per share, resulting in net proceeds of $135.5 million after deducting underwriting discounts and commissions and offering expenses.

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

Nine Months Ended

September 30,

(in thousands)

2 unchanged sentences

Net cash provided by financing activities

Net decrease 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 was $34.0 million during the six months ended June 30, 2021 compared to net cash used in operating activities of $29.3 million during the six months ended June 30, 2020.

Net cash used in operating activities was $56.6 million during the nine months ended September 30, 2021 compared to net cash used in operating activities of $33.8 million during the nine months ended September 30, 2020.

The increase in net cash used in operating activities of $22.8 million was primarily due to increased external research and development costs as we continue to advance our lead programs, increased employee compensation costs, and increased general and administrative costs to support the growth of our organization.

Net Cash Used in Investing Activities

Net cash used in investing activities was $13.9 million during the six months ended June 30, 2021 compared to net cash used in investing activities of $56.6 million during the six months ended June 30, 2020.

The decrease in net cash used in investing activities of $42.7 million was primarily due to lower net purchases of marketable securities during the six months ended June 30, 2021, as compared to during the six months ended June 30, 2020.

Net cash used in investing activities was $120.6 million during the nine months ended September 30, 2021 compared to net cash used in investing activities of $42.5 million during the nine months ended September 30, 2020.

The increase in net cash used in investing activities of $78.1 million was primarily due to higher net purchases of marketable securities during the nine months ended September 30, 2021, as compared to during the nine months ended September 30, 2020.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $47.7 million during the six months ended June 30, 2021 compared to net cash provided by financing activities of $65.0 million during the six months ended June 30, 2020.

Net cash provided by financing activities during the six months ended June 30, 2021 primarily consisted of net proceeds of approximately $47.4 million from the completion of the public offering of our common stock in January 2021.

Net cash provided by financing activities during the six months ended June 30, 2020 primarily consisted of net proceeds of approximately $64.4 million from the issuance of common stock in a private placement in June 2020.

Net cash provided by financing activities was $185.6 million during the nine months ended September 30, 2021 compared to net cash provided by financing activities of $64.9 million during the nine months ended September 30, 2020.

Net cash provided by financing activities during the nine months ended September 30, 2021 primarily consisted of net proceeds of approximately $182.9 million from the completion of the public offerings of our common stock in January 2021 and August 2021.

Net cash provided by financing activities during the nine months ended September 30, 2020 primarily consisted of net proceeds of approximately $64.2 million from the issuance of common stock in a private placement in June 2020.

Funding Requirements

2 unchanged sentences

As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities as of June 30, 2021, will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2023.

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities as of September 30, 2021, will enable us to fund our operating expenses and capital expenditure requirements into 2024.

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.

Our funding requirements and timing and amount of our operating expenditures will depend largely on:

the progress, costs and results of our ongoing open label extension of our Phase 2b clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 2 open label clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 1 clinical trial of FTX-6058 in healthy adult volunteers and our planned Phase 1b clinical trial of FTX-6058 in patients with SCD;

the progress, costs and results of our ongoing open label extension of our Phase 2b clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 2 open label clinical trial of losmapimod for the treatment of FSHD, our ongoing Phase 1 clinical trial of FTX-6058 in healthy adult volunteers and patients with SCD and our planned Phase 1b clinical trial of FTX-6058 in patients with SCD;

the scope, progress, costs and results of discovery research, preclinical development, laboratory testing and clinical trials for our current product candidates in additional indications or for any future product candidates that we may pursue;

22 unchanged sentences

Contractual Obligations

During the three and six months ended June 30, 2021, there have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations” in our Annual Report on Form 10-K filed with the SEC on March 4, 2021.

During the three and nine months ended September 30, 2021, there have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations” in our Annual Report on Form 10-K filed with the SEC on March 4, 2021.

Off-Balance Sheet Arrangements

7 unchanged sentences

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

During the three months ended June 30, 2021, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K filed with the SEC on March 4, 2021.

During the three months ended September 30, 2021, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K filed with the SEC on March 4, 2021.

Recently Issued Accounting Pronouncements

4 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