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Item 7. Management’s Discussion and Analysis

2023-03-17 compared with 2022-03-03 · 60 added, 75 removed, 166 unchanged (45% of the section changed)

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We are a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutics in the disease areas of immunology, inflammation and oncology.

Our goal is to be an industry leader in each of these therapeutic areas and enhance and extend the lives of patients suffering from such diseases.

We currently have three clinical-stage product candidates, in addition to one late-stage preclinical product candidate and five additional preclinical programs.

We are developing seralutinib for the treatment of PAH and commenced enrolling patients for a Phase 2 TORREY clinical trial in PAH patients in December 2020.

We expect topline results from this trial in the second half of 2022, subject to developments in the ongoing COVID-19 pandemic.

We are developing GB004 for the treatment of inflammatory bowel disease, including UC and CD.

We commenced enrolling patients for a Phase 2 SHIFT-UC clinical trial in UC in October 2020, and we completed enrollment in the fourth quarter of 2021.

We expect topline results for the 12-week primary endpoint for this trial in the second quarter of 2022 and topline results for the week 36 treat-through endpoint from this trial in the fourth quarter of 2022.

We are developing GB5121 for the treatment of PCNSL and commenced a Phase 1 study in healthy volunteers in the fourth quarter of 2021.

We are developing GB7208 for the treatment of MS.

GB7208 is currently undergoing preclinical testing, and pending the outcomes of our ongoing preclinical work, we expect to initiate a Phase 1 study in healthy volunteers in the second half of 2022.

We are developing seralutinib for the treatment of pulmonary arterial hypertension, or PAH.

In December 2022, we announced positive topline results from the Phase 2 TORREY Study in PAH patients.

Upon completion of the 24-week blinded portion of the Phase 2 TORREY Study,

patients were able to enroll into an open-label extension trial.

We anticipate reporting results from this ongoing

open-label extension trial in the middle of 2023.We expect to initiate a Phase 3 program in PAH in the second half of 2023.

We are developing GB5121 for the treatment of relapsed / refractory primary CNS lymphoma, or PCNSL, and we commenced enrolling healthy volunteers in a Phase 1 clinical trial in the second quarter of 2021, and we commenced the Phase 1b/2 STAR CNS Study in relapsed / refractory PCNSL and other rare CNS malignancies in the fourth quarter of 2022.

Based upon the benefit / risk profile observed to date and a prioritization of resources to support the seralutinib program, we have decided to pause enrollment in the Phase 1b/2 STAR CNS Study.

We plan to discuss available data with the study's Data Review Committee to determine next steps.

We are developing GB7208 for the treatment of multiple sclerosis.

GB7208 is currently undergoing preclinical testing.

We also have multiple preclinical programs at various stages of development in the therapeutic areas of immunology, inflammation and oncology.

We have assembled a deeply experienced and highly skilled group of industry veterans, scientists, clinicians and key opinion leaders from leading biotechnology and pharmaceutical companies, as well as leading academic centers from around the world.

Our employees are a team of highly dedicated, passionate individuals who pride themselves on a culture of respect, humility, transparency, inclusion, dedication, collaboration and fun.

Our ultimate goal is to enhance and extend the lives of patients.

We were incorporated in October 2015 and commenced operations in 2017.

To date, we have focused primarily on organizing and staffing our company, business planning, raising capital, identifying, acquiring and in-licensing our product candidates and conducting preclinical studies and early clinical trials.

We have funded our operations primarily through equity and debt financings.

We raised $954.8 million from October 2017 through December 31, 2021 through Series A and B convertible preferred stock financings, a convertible note financing, our IPO completed in February 2019, proceeds from our Credit Facility, and proceeds from our concurrent underwritten public offerings of 5.00% convertible Notes due 2027 or the "2027 Notes" and proceeds from our common stock in May 2020.

We raised $1,062.1 million from October 2017 through December 31, 2022 through the sale of Series A and B convertible preferred stock financings, issuance of convertible notes, proceeds from our IPO completed in February 2019, proceeds from our Credit Facility, proceeds from our concurrent underwritten public offerings of 5.00% convertible senior notes due 2027, or the 2027 Notes, and our common stock in May 2020 and proceeds from a private placement of our common stock in July 2022.

As of December 31, 2022, we had $255.7 million in cash, cash equivalents and marketable securities.

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We expect our expenses and operating losses will increase substantially as we conduct our ongoing and planned clinical trials, continue our research and development activities and conduct preclinical studies, and seek regulatory approvals for our product candidates, as well as hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company.

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, including seralutinib and GB004.

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

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However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.

Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our

ability to pursue our business plans and strategies.

Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.

If we are unable to raise additional capital when needed, we could be forced to delay, limit, reduce or terminate our product candidate development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

COVID-19 Pandemic

The COVID-19 pandemic continues to rapidly evolve.

The pandemic and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred;

supply chains have been disrupted;

facilities and production have been suspended;

and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen.

The extent to which the COVID-19 pandemic may impact our business, including our preclinical studies, clinical trials, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the continued geographic spread of variants, the duration of the pandemic, the timing and effectiveness of vaccine distribution, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

With a focus on employee safety and well-being during the COVID-19 pandemic, we have transitioned to a hybrid work model with our employees generally working both remotely and onsite.

We anticipate we will continue to use this model going forward as we provide our employees with the flexibility and tools to support their well-being and effectiveness in an evolving public health environment.

To date, we have been able to continue to supply our product candidates to our patients currently enrolled in our clinical trials, including our Phase 2 clinical trials of seralutinib and GB004 and Phase 1 study of GB5121, and do not currently anticipate any interruptions in supply.

In addition, while we are continuing the clinical trials we have underway in sites across the globe, COVID-19 precautions and related staffing shortages at sites and key vendors have delayed, such as the temporary closure of enrollment in 2020 at certain sites in our ongoing Phase 2 trial for seralutinib in PAH, and may continue to delay completion of our current and future trials and may directly or indirectly impact the timeline for data readouts, initiation of, as well as monitoring, data collection and analysis and other related activities for, some of our current and future clinical trials.

For example, our current expectations for how we will continue to enroll our Phase 2 clinical trial of seralutinib are based on an assumption that clinical trial and healthcare activities remain somwhat normal, and clinical sites stay open in the first half of 2022 and that we do not experience another slowdown in enrollment such as what we experienced during the surge of the COVID-19 Delta variant in the summer of 2021.

In particular, with respect to seralutinib, some PAH clinical trial sites may limit operations and enrollment as PAH patients may be at a higher risk of COVID-19 complications than the general population.

Therefore, our assumptions around enrollment timing may prove to be incorrect, in particular if COVID-19 continues to spread and/or surge.

In light of recent developments relating to the COVID-19 pandemic, and consistent with the FDA’s updated industry guidance for conducting clinical trials, clinical trials may be deprioritized in favor of treating patients who have contracted the virus or to prevent the spread of the virus.

This may lead to clinical trial protocol deviations or to discontinuation of treatment for patients who are currently enrolled in our trials.

Any delays in the completion of our clinical trials, data analysis or readouts and any disruption in our supply chain could have a material adverse effect on our business, results of operations and financial condition.

The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets.

As we continue to actively advance our programs, we are in close contact with our principal investigators and clinical sites and continue to assess any impacts of the ongoing COVID-19 global pandemic on our drug manufacturing, nonclinical activities, clinical trials, expected timelines and costs on an ongoing basis.

In addition, while we are continuing the clinical trials

we have underway in sites across the globe, COVID-19 precautions and related staffing shortages at sites and key vendors have delayed, such as the temporary closure of enrollment in 2020 at certain sites in our ongoing Phase 2 trial for seralutinib in PAH, and may continue to delay completion of our current and future trials and may directly or indirectly impact the timeline for data readouts, initiation of, as well as monitoring, data collection and analysis and other related activities for some of our current and future clinical trials.

In light of the COVID-19 pandemic, and consistent with the FDA’s updated industry guidance for conducting clinical trials, clinical trials may be deprioritized in favor of treating patients who have contracted the virus or to prevent the spread of the virus.

The direct and indirect impacts of COVID-19 on our business could alter our forecasted timelines, which could have a material adverse effect on our business, results of operations and financial condition.

We will continue to evaluate the impact of the COVID-19 pandemic on our business.

Components of Results of Operations

We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products for the foreseeable future.

Operating expenses

Research and development

Research and development expenses relate primarily to preclinical and clinical development of our product candidates and discovery efforts.

Research and development expenses relate primarily to preclinical and clinical development of our product candidates and discovery efforts, as well as our discontinued clinical product candidates.

Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

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Stock-based compensation and personnel and common expenses not attributable to a specific program are considered unallocated research and development expenses.

We plan to substantially increase our research and development expenses for the foreseeable future as we continue the development of our product candidates and conduct discovery and research activities for our preclinical programs.

We expect our research and development expenses for the foreseeable future to remain relatively flat as we continue the development of our product candidates and conduct discovery and research activities for our preclinical programs.

We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our product candidates due to the inherently unpredictable nature of preclinical and clinical development.

Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations.

We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential.

preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential.

We will need to raise substantial additional capital in the future.

Our clinical development costs may vary significantly based on factors such as:

• the costs incurred as a result of the COVID-19 pandemic, including clinical trial delays;

• per patient trial costs;

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• the cost and timing of manufacturing our product candidates;

• the costs incurred as a result of the COVID-19 pandemic, including clinical trial delays;

• the phase of development of our product candidates;

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In process research and development, or IPR&D, expenses include IPR&D acquired as part of an asset acquisition or in-license for which there is no alternative future use, are expensed as incurred.

IPR&D expenses consist of our upfront and milestone payments made to Pulmokine, Inc., in connection with the in-license of seralutinib, our upfront payments made to Aadi in connection with the in-license and subsequent amendment of the in-license of GB004, our upfront and milestone payments made to Adhaere Pharmaceuticals, Inc., or Adhaere, in connection with the acquisition of GB1275, and upfront and milestone payments made in connection with the acquisition of certain preclinical programs.

IPR&D expenses consist of our upfront and milestone payments made to Pulmokine, Inc., in connection with the in-license of seralutinib and upfront and milestone payments made in connection with the acquisition of certain preclinical programs.

General and administrative

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Other significant costs include facility-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services and insurance costs.

We expect our general and administrative expenses will increase for the foreseeable future to support our expanded infrastructure and increased costs of operating as a public company.

These increases will likely include increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs associated with operating as a public company.

We expect our general and administrative expenses for the foreseeable future to remain relatively flat to support our current infrastructure and continued costs of operating as a public company.

These expenses will likely include audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, and investor relations costs associated with operating as a public company.

Other income (expense), net

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Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP.

The preparation of these financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements.

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

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

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Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could

result in us reporting amounts that are too high or too low in any particular period.

To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred.

Convertible Senior Notes

In accounting for the issuance of the 2027 Notes, we separated the 2027 Notes into liability and equity components at issuance.

The carrying amount of the liability component was calculated by measuring the fair value of similar debt instruments that do not have associated convertible features.

The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2027 Notes.

The equity component is not remeasured as long as it continues to meet the condition for equity classification.

The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense over the term of the 2027 Notes.

We allocated the issuance costs incurred to the liability and equity components of the 2027 Notes based on their relative fair values.

Issuance costs attributable to the liability component were recorded as a reduction to the liability portion of the 2027 Notes and are being amortized to interest expense over the term of the 2027 Notes.

Issuance costs attributable to the equity component, representing the conversion option, were netted with the equity component in stockholders' equity.

Results of Operations for the Years Ended December 31, 2022 and 2021

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Interest expense (13,880) (19,440) 5,560

Other income (expense) 799 (174) 973

Other income 1,512 799 713

Total other expense, net (10,785) (17,880) 7,095

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Research and development

Research and development expenses were $170.3 million for the year ended December 31, 2021, compared to $160.9 million for the year ended December 31, 2020, for an increase of $9.4 million, which was primarily attributable to an increase of $18.0 million of costs associated with preclinical studies and clinical trials for GB004, an increase of $11.9 million of costs associated with preclinical studies and clinical trials for GB002, an increase of $16.2 million of costs associated with preclinical studies and clinical trials for GB5121, and an increase of $6.2 million of costs associated with preclinical studies for other programs;

offset by a decrease of $34.6 million of costs associated with preclinical studies and clinical trials for GB001 and a decrease of $8.3 million of costs associated with preclinical studies and clinical trials for GB1275.

Research and development expenses were $170.9 million for the year ended December 31, 2022, compared to $170.3 million for the year ended December 31, 2021, for an increase of $0.7 million, which was primarily attributable to an increase of $23.1 million of costs associated with preclinical studies and clinical trials for GB5121 and an increase of $16.5 million of costs associated with preclinical studies and clinical trials for seralutinib;

offset by a decrease of $20.9 million of costs associated with preclinical studies and clinical trials for terminated GB004 program, a decrease of $10.3 million of costs associated with preclinical studies for other programs, and a decrease of $7.7 million of costs associated with preclinical studies and clinical trials for other terminated programs.

The following table shows our research and development expenses by program for the years ended December 31, 2022 and 2021:

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(in thousands)

GB001 $ 1,964 $ 36,576

Seralutinib 62,983 46,490

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GB004 21,449 42,338

GB5121 27,365 11,118

Other programs 33,378 43,692

Other terminated programs 2,684 10,382

Total research and development $ 170,919 $ 170,267

In process research and development

There were no significant IPR&D expenses for the year ended December 31, 2021.

IPR&D expenses for the year ended December 31, 2020 were $23.4 million, which was primarily attributable to a $15.0 million upfront payment to Aadi in connection with the amendment to the in-license agreement of GB004 and a $5.0 million milestone payment to Pulmokine for the initiation of the Phase 2 clinical trial for seralutinib.

There were no significant IPR&D expenses for the years ended December 31, 2022 and 2021.

General and administrative

General and administrative expenses were $45.8 million for the year ended December 31, 2021, compared to $49.7 million for the year ended December 31, 2020, for a decrease of $3.9 million, which was primarily attributable to a $6.7 million decrease in stock-based compensation costs;

offset by $2.4 million of accrued costs associated with a settlement of outstanding securities litigation and a $0.5 million increase in insurance costs.

General and administrative expenses were $47.6 million for the year ended December 31, 2022, compared to $45.8 million for the year ended December 31, 2021, for an increase of $1.8 million, which was primarily attributable to a $5.1 million increase in stock-based compensation costs;

offset by a decrease of $2.4 million of accrued costs associated with a settlement of outstanding securities litigation in 2021 and a $1.0 million decrease in insurance costs.

Other expense, net

Other expense, net was $17.9 million for the year ended December 31, 2021, compared to other expense, net of $9.4 million for the year ended December 31, 2020, for an increase of $8.5 million, which was primarily attributable to a $6.8 million increase in interest expense, a $2.7 million decrease in interest income earned on our cash, cash equivalents and marketable securities during the period, offset by an increase of $1.3 million of sublease income.

Other expense, net was $10.8 million for the year ended December 31, 2022, compared to other expense, net of $17.9 million for the year ended December 31, 2021, for a decrease of $7.1 million, which was primarily attributable to a $5.6 million decrease in interest expense, an increase of $2.2 million of other income related to investment accretion and amortization and a $0.8 million increase in interest income earned on our cash, cash equivalents and marketable securities during the period;

offset by a $1.1 million decrease in sublease income and a decrease of $0.5 million of other income.

Results of Operations for the Years Ended December 31, 2021 and 2020

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Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Under our license agreements with Pulmokine and Aadi, as well as our other license and acquisition agreements, we have payment obligations that are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones and are required to make royalty payments in connection with the sale of products developed under those agreements.

We may also use cash on hand to repurchase 2027 Notes through open-market transactions, including through a Rule 10b5-1 trading plan to facilitate open-market repurchases, or otherwise, from time to time.

Under our license agreement with Pulmokine, as well as our other license and acquisition agreements, we have payment obligations that are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones and are required to make royalty payments in connection with the sale of products developed under those agreements.

As of December 31, 2022, we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales.

Other contractual obligations include future payments under our Credit Facility, 2027 Notes and existing operating leases.

From our inception through the year ended December 31, 2021, our operations have been financed primarily by gross proceeds of $942.0 million from the sale of our convertible preferred stock, convertible promissory note, proceeds from our IPO, proceeds from our Credit Facility, and proceeds from our concurrent underwritten public offerings of 2027 Notes and common stock.

From our inception through the year ended December 31, 2022, our operations have been financed primarily by gross proceeds of $1,062.1 million from the sale of our convertible preferred stock, issuance of convertible notes, proceeds from our IPO, proceeds from our Credit Facility, proceeds from our concurrent underwritten public offerings of 2027 Notes and common stock, and proceeds from our private placement of common stock.

As of December 31, 2022, we had cash, cash equivalents and marketable securities of $255.7 million.

Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to capital preservation and liquidity.

On February 12, 2019, we closed our IPO and the underwriters in the IPO purchased 19,837,500 shares, including the full exercise of their option to purchase additional shares of common stock.

The net proceeds from the IPO were $291.3 million, after deducting underwriting discounts and commissions and estimated offering costs.

In connection with the closing of the IPO, the outstanding shares of our convertible preferred stock were converted into shares of common stock at a ratio of 4.5-to-one.

On May 2, 2019, we entered into a credit, guaranty and security agreement, as amended on September 18, 2019 and July 2, 2020, pursuant to which the lenders party thereto agreed to make term loans available to us for working capital and general business purposes, in a principal amount of up to $150.0 million in term loan commitments, including a $30.0 million term loan which was funded at the closing date, with the ability to access the remaining $120.0 million in two additional tranches (each $60.0 million), subject to specified availability periods, the achievement of certain clinical development milestones, minimum cash requirements and other customary conditions, or the Credit Facility.

As of December 31, 2021, no other tranches under the Credit Facility were available to be drawn.

As of December 31, 2022, no tranches under the Credit Facility were available to be drawn.

On April 10, 2020, we filed a registration statement on Form S-3, or the 2020 Shelf Registration Statement, covering the offering from time to time of common stock, preferred stock, debt securities, warrants and units, which registration statement became automatically effective on April 10, 2020.

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Our concurrent offerings of 2027 Notes and common stock were registered pursuant to the 2020 Shelf Registration Statement.

Additional information about the our long-term borrowings is presented in Note 5 “Indebtedness” to the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K, herein by this reference.

On March 3, 2022, we filed a registration statement on Form S-3 covering the offering from time to time of common stock, preferred stock, debt securities, warrants and units, which registration statement became automatically effective on March 3, 2022.

On July 15, 2022, we completed a private placement of 16,649,365 shares of our common stock.

The aggregate gross proceeds for the private placement were approximately $120.1 million, before deducting offering expenses.

On August 9, 2022, we filed a registration statement on Form S-3 registering the resale of the shares of common stock issued in the private placement, which registration statement became automatically effective on August 9, 2022.

Additional information about our long-term borrowings is presented in Note 5 “Indebtedness” to the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K, herein by this reference.

The following table shows a summary of our cash flows for each of the years shown below:

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Operating activities

During the year ended December 31, 2022, operating activities used approximately $187.0 million of cash, primarily resulting from a net loss of $229.4 million and payments against operating lease liabilities of $2.7 million, partially reduced by stock-based compensation expense of $42.6 million and amortization of operating lease right-of-use assets of $2.6 million.

During the year ended December 31, 2021, operating activities used approximately $188.9 million of cash, primarily resulting from a net loss of $234.0 million, partially reduced by stock-based compensation expense of $32.0 million, amortization of long-term debt discount and issuance costs of $6.7 million and accrued research and development expenses of $5.8 million.

During the year ended December 31, 2020, operating activities used approximately $176.4 million of cash, primarily resulting from a net loss of $243.4 million, partially reduced by stock-based compensation expense of $38.7 million, IPR&D expenses of $23.4 million and amortization of long-term debt discount and issuance costs of $3.9 million.

During the year ended December 31, 2019, operating activities used approximately $144.8 million of cash, primarily resulting from a net loss of $180.3 million, partially reduced by stock-based compensation expense of $20.8 million, and changes in operating assets and liabilities of $12.3 million.

Net cash provided by changes in operating assets and liabilities consisted primarily of increases in accounts payable, accrued research and development expenses, and accrued expenses of $13.9 million, and an increase in other assets of $2.7 million due to long-term deposits for clinical development activities and property leases, partially offset by an increase in prepaid expenses and other current assets due to prepayments for clinical development activities, investments receivable, and receivables for stock option exercises of $4.4 million.

Investing activities

During the year ended December 31, 2022, investing activities used approximately $1.0 million of cash, primarily resulting from the purchase of marketable securities of $238.0 million and the purchase of property and equipment of $0.4 million, partially offset by maturities of marketable securities of $237.5 million.

During the year ended December 31, 2021, investing activities used approximately $117.4 million of cash, primarily resulting from the purchase of marketable securities of $152.0 million, partially offset by maturities of marketable securities of $36.2 million.

During the year ended December 31, 2020, investing activities provided approximately $215.3 million of cash, primarily resulting from the sales and maturities of marketable securities of $349.2 million, partially offset by the purchase of marketable securities of $109.0 million and upfront and milestone payments of $23.4 million made to third parties in connection with the in-license or acquisition of our clinical and preclinical programs.

During the year ended December 31, 2019, investing activities used approximately $147.1 million of cash, primarily resulting from the purchase of marketable securities of $499.1 million, partially offset by sales and maturities of investments of $358.5 million.

Financing activities

During the year ended December 31, 2021, financing activities provided $3.3 million of cash, resulting from the proceeds from the exercise of stock options of $2.0 million, and from the purchase of shares pursuant to the Employee Stock Purchase Plan of $1.3 million.

During the year ended December 31, 2022, financing activities provided $117.1 million of cash, resulting from the proceeds from the private offering of $119.9 million, the proceeds from the exercise of stock options of $1.7 million, and from proceeds from the purchase of shares pursuant to our 2019 Employee Stock Purchase Plan, or ESPP, of $1.2 million, partially offset by the principal repayments of long-term debt of $5.8 million.

During the year ended December 31, 2020, financing activities provided $312.5 million of cash, primarily resulting from the concurrent registered underwritten public offerings of 2027 Notes and common stock for net proceeds of $193.6 million and $117.1 million, respectively.

During the year ended December 31, 2019, financing activities provided $321.6 million of cash, primarily resulting from the net proceeds from our IPO of $291.3 million, and proceeds from our Credit Facility of $30.0 million, offset by $1.8 million of debt issuance costs.

Funding requirements

Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities, and access to our Credit Facility, will be sufficient to fund our operations into the second half of 2023.

However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

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• costs associated with any products or technologies that we may in-license or acquire;

• any delays and cost increases that result from the COVID-19 pandemic.

• any delays and cost increases that result from the COVID-19 pandemic or other epidemic diseases.

Until such time as we can generate substantial product revenues to support our cost structure, if ever, we expect to finance our cash needs through equity offerings, our Credit Facility, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements.

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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-K

Item 7. Management’s Discussion and Analysis