What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-14 compared with 2024-08-14 · 107 added, 103 removed, 308 unchanged (41% of the section changed)

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Food and Drug Administration (“FDA”) in March 2024;

• our expectation that PEMGARDA will be our first monoclonal antibody (“mAb”) in a planned series of innovative mAb candidates designed to keep pace with SARS-CoV-2 viral evolution, and our plans to leverage our INVYMAB platform approach to periodically introduce new or engineered mAb candidates as the SARS-CoV-2 virus evolves over time, including our expectation that VYD2311, a mAb optimized for neutralization potency against prominent SARS-CoV-2 variants, will be the next pipeline program to advance into clinical development;

• the anticipated timing, design, progress and results of preclinical studies and clinical trials of our product candidates, including statements regarding initiation or completion of studies or trials and related preparatory work, the period during which results of any studies or trials will become available, and potential regulatory submissions;

• the anticipated timing, design, progress and results of preclinical studies and clinical trials of our product candidates, such as pemivibart and VYD2311, including statements regarding initiation or completion of studies or trials and related preparatory work, the period during which results of any studies or trials will become available, and potential regulatory submissions;

• our commitment to delivering protection from serious viral infectious diseases, beginning with SARS-CoV-2, and our aim to develop a continuous repertoire of SARS-CoV-2 neutralizing mAbs to keep pace with viral evolution;

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• our expectations regarding our ability to obtain and maintain regulatory authorizations or approvals for, our product candidates;

• our plans regarding SARS-CoV-2 variant monitoring of antiviral activity as part of our ongoing industrial virology effort;

• our expectations regarding the size of the patient populations, market acceptance and opportunity for and clinical utility of our product candidates, if authorized or approved for commercial use;

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Our proprietary INVYMAB platform approach combines state-of-the-art viral surveillance and predictive modeling with advanced antibody engineering.

INVYMAB is designed to facilitate the rapid, serial generation of new monoclonal antibodies (“mAbs”) to keep pace with evolving viral threats.

INVYMAB is designed to facilitate the rapid, serial generation of new monoclonal antibodies (“mAbs”) to address evolving viral threats.

On March 22, 2024, we received emergency use authorization (“EUA”) from the U.S.

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As the SARS-CoV-2 virus evolves over time, we anticipate leveraging our INVYMAB platform approach to periodically introduce new or engineered mAb candidates, an approach that would be analogous to the periodic updates made to influenza and COVID-19 vaccines.

In January 2024, we nominated VYD2311, a mAb optimized for neutralization potency against prominent SARS-CoV-2 variants, as a drug candidate, and we expect it will be the next pipeline program to advance into clinical development.

In January 2024, we nominated VYD2311, a next generation mAb candidate for COVID-19, as a drug candidate, and in September 2024, we announced dosing of the first participants in a Phase 1 clinical trial of VYD2311.

VYD2311 is a mAb with high in vitro neutralization potency shown against prominent SARS-CoV-2 variants tested to date.

The Phase 1 randomized, blinded, placebo-controlled clinical trial will evaluate escalating dosing as well as safety, tolerability, pharmacokinetics and immunogenicity of VYD2311 in healthy trial participants.

The Phase 1 clinical trial is being conducted in Australia and will evaluate multiple dose levels of VYD2311 through various routes of administration, including exploration of intramuscular administration and subcutaneous administration, which are designed to be more system- and patient-friendly than intravenous administration.

We expect preliminary data readouts from the Phase 1 clinical trial late in the fourth quarter of 2024 and anticipate additional clinical readouts from the VYD2311 program throughout 2025.

Like pemivibart, VYD2311 was engineered from adintrevimab, our investigational mAb that has a robust safety data package and demonstrated clinically meaningful results in global Phase 2/3 clinical trials for both the prevention and treatment of COVID-19.

In May 2024, we announced general alignment with the FDA on an expedient, repeatable immunobridging pathway to future potential EUAs for serial, novel mAbs for the prevention and treatment of symptomatic COVID-19.

This pathway provides us with the opportunity to rapidly, efficiently, and durably deliver high value medicines that prevent and treat symptomatic COVID-19 in vulnerable populations.

This pathway provides us with the opportunity to rapidly, efficiently, and durably deliver high value medicines that prevent and treat symptomatic COVID-19 in vulnerable

In addition to developing candidates for COVID-19, we expect to apply our INVYMAB platform approach to produce lead molecules for other viral diseases, such as influenza.

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COVID-19 persists and continues to impact patients, notably those who are immunocompromised, and combating this disease will require a variety of effective and safe prevention and treatment options for years to come.

By leveraging our capabilities, which we have developed through our experience with adintrevimab and pemivibart and nearly four years in the COVID-19 space, we aim to develop a continuous repertoire of SARS-CoV-2 neutralizing mAbs to keep pace with viral evolution.

By leveraging our capabilities, which we have developed through our experience with adintrevimab and pemivibart and over four years in the COVID-19 space, we aim to develop a continuous repertoire of SARS-CoV-2 neutralizing mAbs to keep pace with viral evolution.

PEMGARDA has not been approved but has been authorized for emergency use by the FDA under an EUA, for pre-exposure prophylaxis of COVID-19 in certain adults and adolescent individuals (12 years of age and older weighing at least 40 kg).

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§ 360bbb-3(b)(1), unless the declaration is terminated or authorization revoked sooner.

PEMGARDA is authorized for use only when the combined national frequency of variants with substantially reduced susceptibility to PEMGARDA is less than or equal to 90%, based on available information including variant susceptibility to PEMGARDA and national variant frequencies.

We engage in active SARS-CoV-2 variant monitoring of antiviral activity as part of our ongoing industrial virology effort, which leverages a consistent, high-quality, independent, third-party pseudoviral system that routinely tests authentic Invivyd-produced molecules and is supported by structure-based analytics.

In September 2024, we announced continued neutralizing activity of PEMGARDA (pemivibart) against SARS-CoV-2 variants KP.3.1.1 and LB.1, and attractive neutralization potency of VYD2311 against the same contemporary viruses, and also provided an update to ongoing structural analysis showing no meaningful mutational change in the pemivibart binding site since the Omicron shift late in 2021.

Since our inception, we have devoted substantially all of our resources to organizing and staffing, building an intellectual property portfolio, business planning, conducting research and development, establishing and executing arrangements with third parties for the manufacture of our product candidates, and raising capital.

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Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and commercialization of one or more of our product candidates, as they become authorized or approved.

Since our inception, we have incurred significant losses, including a net loss of $90.7 million for the six months ended June 30, 2024.

As of June 30, 2024, we had an accumulated deficit of $822.8 million.

Since our inception, we have incurred significant losses, including a net loss of $151.5 million for the nine months ended September 30, 2024.

As of September 30, 2024, we had an accumulated deficit of $883.6 million.

We may continue to incur significant expenses and recognize losses in the foreseeable future as we expand and progress our research and development activities, manufacturing activities and commercialization efforts.

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• develop product candidates in any new indications or patient populations;

• advance our preclinical and discovery programs, including development and screening of additional antibodies;

• advance our preclinical and discovery programs, including development and screening of additional antibodies, as well as ongoing SARS-CoV-2 variant monitoring and testing;

• seek regulatory authorization or approval for any product candidates that successfully complete clinical trials;

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• incur additional legal, accounting and other expenses in operating as a public company.

We have implemented a go-to-market strategy, including building our own commercial and marketing organization and outsourcing to contract sales, market access and medical science liaison organizations.

On March 22, 2024, we received EUA from the FDA for PEMGARDA, and as such, we will continue to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

As a result, we will require additional funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate significant product revenue, if ever, we expect to finance our operations through a combination of equity offerings, government or private-party funding or grants, debt financings or other capital sources, such as collaborations with other companies, strategic alliances or licensing arrangements.

As a result, we will require additional funding through a combination of contribution from revenues, equity offerings, government or private-party grants, debt financings or other capital sources, such as collaborations with other companies, strategic alliances or licensing arrangements to support our continuing operations and pursue our growth strategy.

We may be unable to secure additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all.

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Cost of product revenue includes PEMGARDA manufacturing costs, labor and overhead costs, and stability study costs.

PEMGARDA manufacturing costs include manufacturing materials, third-party manufacturing costs, packaging costs and shipping costs.

PEMGARDA manufacturing costs include manufacturing materials, third-party manufacturing costs, packaging costs, shipping costs, and royalties.

Research and Development Expenses

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Product candidates in later stages of clinical development generally have higher and more variable development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Our research and development expenses will increase as we continue to advance PEMGARDA and as we expect to advance VYD2311 through clinical development, including the associated manufacturing activities, pursue EUA or regulatory approval of our product candidates, and continue to discover and develop additional product candidates.

Our research and development expenses will increase as we continue to advance PEMGARDA and as we expect to continue advancing VYD2311 through clinical development, including the associated manufacturing activities, pursue EUA or regulatory approval of our product candidates, and continue to discover and develop additional product candidates.

At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of any of our product candidates.

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We also expect to incur additional intellectual property-related expenses as we file additional patent applications to protect innovations arising from our research and development activities.

In June 2022, and subsequently amended in September 2022, we entered into a lease agreement for dedicated laboratory and office space in Newton, Massachusetts for research and development purposes.

Through June 30, 2024, we have operated as a hybrid company with employees working at our corporate headquarters and remotely.

In June 2022, and subsequently amended in September 2022 and August 2024, we entered into a lease agreement for dedicated laboratory and office space in Newton, Massachusetts for research and development purposes.

Through September 30, 2024, we have operated as a hybrid company with employees working at our corporate headquarters and remotely.

We have not incurred material operating expenses for the rent, maintenance and insurance of facilities, or for the depreciation of fixed assets.

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We continue to monitor the manner in which countries will enact legislation to implement the Pillar Two framework proposed by the Organisation for Economic Co-operation and Development, which proposes a 15% global corporate minimum tax.

As of June 30, 2024, various countries have enacted aspects of Pillar Two while committing to enact additional aspects in future years.

As of September 30, 2024, various countries have enacted aspects of Pillar Two while committing to enact additional aspects in future years.

While we do not expect these rules to have a material impact on our effective tax rate, we continue to monitor these initiatives on a global basis.

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:

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:

Three Months Ended September 30,

(in thousands)

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Product Revenue, Net

Product revenue, net was $2.3 million for the three months ended June 30, 2024.

There was no product revenue, net for the three months ended June 30, 2023.

The $2.3 million increase is the result of product sales in the second quarter of 2024 following the launch of PEMGARDA.

Product revenue, net was $9.3 million for the three months ended September 30, 2024.

There was no product revenue, net for the three months ended September 30, 2023.

The $9.3 million increase is the result of product sales in the third quarter of 2024 following the launch of PEMGARDA.

Cost of Product Revenue

Cost of product revenue was $0.1 million for the three months ended June 30, 2024.

There was no cost of product revenue for the three months ended June 30, 2023.

The $0.1 million is the result of PEMGARDA product sales following launch and certain period costs.

Cost of product revenue was $0.8 million for the three months ended September 30, 2024.

There was no cost of product revenue for the three months ended September 30, 2023.

The $0.8 million increase is the result of PEMGARDA product sales following launch and certain period costs.

We began capitalizing our inventory costs in March 2024, in connection with EUA from the FDA and based upon our expectation that these costs would be recoverable through commercialization of PEMGARDA.

Prior to the capitalization of our inventory costs, such costs were recorded as research and development expenses in the period incurred.

Had our pre-EUA manufacturing costs been capitalized, our reported margins would have been approximately 80%.

Had our pre-EUA manufacturing costs been capitalized, our reported margins would approach 80%.

Research and Development Expenses

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands)

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(2) In March 2024, we announced the nomination of VYD2311 as a novel mAb therapeutic option for COVID-19.

Research and development expenses were $30.3 million for the three months ended June 30, 2024, compared to $43.6 million for the three months ended June 30, 2023.

The $13.3 million decrease in research and development expenses was primarily due to the following:

• the decrease in direct costs related to our VYD222 program of $29.1 million in contract costs for commercial manufacturing and $0.2 million in nonclinical expenses, partially offset by increases of $2.1 million in contract research costs for our CANOPY clinical trial and $0.3 million in other external expenses;

• the increase in direct costs related to our VYD2311 program due to the nomination of our VYD2311 product candidate in the first quarter of 2024, consisting of contract manufacturing costs;

• the decrease in direct costs related to our adintrevimab program of $0.4 million following the nomination of our VYD222 product candidate in the first quarter of 2023;

• the decrease in personnel-related costs of $2.7 million due to the capitalization of certain inventory costs which were recorded as research and development costs prior to the EUA of PEMGARDA;

• the decrease in external discovery-related and other costs due to a $0.9 million decrease in other nonclinical expenses, partially offset by a $0.3 million increase in contract research costs related to our pipeline candidates and other external costs.

Research and development expenses were $57.9 million for the three months ended September 30, 2024, compared to $25.6 million for the three months ended September 30, 2023.

The $32.3 million increase in research and development expenses was primarily due to the following:

• the decrease in direct costs related to our VYD222 program resulted from $4.3 million in contract costs for commercial manufacturing, $3.5 million in contract research costs for our CANOPY clinical trial, and $0.2 million in nonclinical expenses, partially offset by increases of $0.3 million in other external expenses;

• the increase in direct costs related to our VYD2311 program resulted from the nomination of our VYD2311 product candidate in the first quarter of 2024 and consisted primarily of contract manufacturing costs;

• the direct costs related to our adintrevimab program were consistent following the nomination of our VYD222 product candidate in the first quarter of 2023;

• the decrease in personnel related costs related to a $1.8 million decrease in stock-based compensation and the capitalization of certain inventory costs which were recorded as research and development personnel related costs prior to the EUA of PEMGARDA;

• the decrease in external discovery-related and other costs resulted from a $1.9 million decrease in contract manufacturing costs and $0.9 million decrease in other nonclinical expenses, partially offset by a $1.2 million increase in other external costs related to our pipeline candidates.

Acquired In-Process Research and Development (“IPR&D”) Expenses

There was no IPR&D expense recognized during the three months ended June 30, 2024.

IPR&D expenses of $0.2 million for the three months ended June 30, 2023 consisted entirely of license fees due to WuXi Biologics under the Cell Line License Agreement.

There was no IPR&D expense recognized during the three months ended September 30, 2024.

IPR&D expenses of $4.6 million for the three months ended September 30, 2023 consisted of $3.2 million incurred related to a milestone under the Adimab Assignment Agreement and $1.4 million incurred related to an option exercise fee, a drug discovery fee and an optimization completion fee under the Adimab Collaboration Agreement.

Selling, General and Administrative Expenses

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands)

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Total selling, general and administrative expenses

Selling, general and administrative expenses were $21.1 million for the three months ended June 30, 2024, compared to $10.1 million for the three months ended June 30, 2023.

Selling, general and administrative expenses were $13.0 million for the three months ended September 30, 2024, compared to $12.9 million for the three months ended September 30, 2023.

The $0.1 million increase in selling, general and administrative expenses was primarily due to the following:

• the increase in personnel-related costs of $6.9 million was primarily due to an increase in headcount-related costs, including an increase in stock-based compensation expense of $4.5 million.

The increase in stock-based compensation expense was primarily due to stock-based compensation expense recognized associated with the accelerated vesting of a portion of the outstanding stock options granted to our former Chief Executive Officer, in accordance with the terms of his employment agreement;

• the increase in professional and consultant fees and other costs of $3.3 million and $0.7 million, respectively, was primarily related to the commercialization of PEMGARDA.

Other income was $2.0 million for the three months ended June 30, 2024, consisting primarily of interest earned on our invested cash balances.

Other income was $3.6 million for the three months ended June 30, 2023, consisting of $1.6 million of interest earned on our invested cash balances and $2.0 million of net accretion of discounts related to our marketable securities.

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:

Six Months Ended June 30,

• the decrease in personnel related costs was primarily due to decreases in headcount and stock-based compensation;

• the increase in professional and consultant fees was primarily due to a $3.7 million increase related to the commercialization of PEMGARDA, partially offset by a $1.4 million and $0.3 million decrease in professional service fees and director and officer insurance premiums, respectively;

• other costs remained relatively consistent between periods.

Other income was $1.6 million for the three months ended September 30, 2024, consisting primarily of interest earned on our invested cash balances.

Other income was $3.6 million for the three months ended September 30, 2023, consisting of $1.9 million of interest earned on our invested cash balances and $1.7 million of net accretion of discounts related to our marketable securities.

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:

Nine Months Ended September 30,

(in thousands)

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Product Revenue, Net

Product revenue, net was $2.3 million for the six months ended June 30, 2024.

There was no product revenue, net for the six months ended June 30, 2023.

The $2.3 million increase is the result of product sales in the second quarter of 2024 following the launch of PEMGARDA.

Product revenue, net was $11.6 million for the nine months ended September 30, 2024.

There was no product revenue, net for the nine months ended September 30, 2023.

The $11.6 million increase is the result of product sales following the launch of PEMGARDA in the second quarter of 2024.

Cost of Product Revenue

Cost of product revenue was $0.1 million for the six months ended June 30, 2024.

There was no cost of product revenue for the six months ended June 30, 2023.

The $0.1 million is the result of PEMGARDA product sales following launch and certain period costs.

Cost of product revenue was $0.9 million for the nine months ended September 30, 2024.

There was no cost of product revenue for the nine months ended September 30, 2023.

The $0.9 million increase is the result of PEMGARDA product sales following launch and certain period costs.

Prior to the capitalization of our inventory costs, such costs were recorded as research and development expenses in the period incurred.

Had our pre-EUA manufacturing costs been capitalized, our reported margins would have been approximately 80%.

Had our pre-EUA manufacturing costs been capitalized, our reported margins would approach 80%.

Research and Development Expenses

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Unallocated research and development expenses:

Personnel-related costs

Personnel related (including stock-based compensation)

External discovery-related and other costs

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(2) In March 2024, we announced the nomination of VYD2311 as a novel mAb therapeutic option for COVID-19.

Research and development expenses were $61.5 million for the six months ended June 30, 2024, compared to $70.8 million for the six months ended June 30, 2023.

The $9.3 million decrease in research and development expenses was primarily due to the following:

• the decrease in direct costs related to our VYD222 program of $22.2 million in contract costs for commercial manufacturing and $0.3 million in nonclinical expenses, partially offset by increases of $5.2 million in contract research costs for our CANOPY clinical trial and $0.2 million in other external expenses;

• the increase in direct costs related to our VYD2311 program due to the nomination of our VYD2311 product candidate in the first quarter of 2024, consisting of contract manufacturing costs;

• the decrease in direct costs related to our adintrevimab program of $2.8 million following the nomination of our VYD222 product candidate in the first quarter of 2023;

• the decrease in personnel-related costs of $3.2 million due to the capitalization of certain inventory costs which were recorded as research and development costs prior to the EUA of PEMGARDA;

• the decrease in external discovery-related and other costs due to a $3.2 million decrease in contract manufacturing costs related to our pipeline candidates, a $1.8 million decrease in other nonclinical expenses and a $0.4 million decrease in other external costs.

Research and development expenses were $119.3 million for the nine months ended September 30, 2024, compared to $96.4 million for the nine months ended September 30, 2023.

The $22.9 million increase in research and development expenses was primarily due to the following:

• the decrease in direct costs related to our VYD222 program resulted from $26.5 million in contract costs for commercial manufacturing and $0.5 million in nonclinical expenses, partially offset by increases of $1.8 million in contract research costs for our CANOPY clinical trial and $0.5 million in other external expenses;

• the decrease in direct costs related to our adintrevimab program of $2.9 million resulted from the nomination of our VYD222 product candidate in the first quarter of 2023;

• the decrease in personnel related costs related to capitalization of $4.0 million of certain inventory costs which were recorded as research and development costs prior to the EUA of PEMGARDA and a $2.6 million decrease primarily due to a reduction in headcount, including a $0.7 million decrease due to stock-based compensation;

• the decrease in external discovery-related and other costs resulted from a $5.1 million decrease in contract manufacturing costs related to our pipeline candidates and a $2.7 million decrease in other nonclinical expenses, partially offset by a $0.6 million increase in other external costs and $0.2 million in clinical trial expenses.

Acquired In-Process Research and Development (“IPR&D”) Expenses

There was no IPR&D expense recognized during the six months ended June 30, 2024.

IPR&D expenses of $1.0 million for the six months ended June 30, 2023 consisted of a $0.4 million milestone payment that became due to Adimab in March 2023 upon dosing of the first subject in a Phase 1 clinical trial evaluating VYD222 under the Adimab Assignment and License Agreement and $0.6 million in license fees due to WuXi Biologics under the Cell Line License Agreement.

There was no IPR&D expense recognized during the nine months ended September 30, 2024.

IPR&D expenses of $5.6 million for the nine months ended September 30, 2023 consisted of $3.6 million incurred related to milestones under the Adimab Assignment Agreement, $1.4 million incurred related to an option exercise fee, a drug discovery fee and an optimization completion fee under the Adimab Collaboration Agreement, and $0.6 million incurred related to license fees under the WuXi Biologics’ Cell Line License Agreement.

Selling, General and Administrative Expenses

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

Personnel-related costs

Personnel related (including stock-based compensation)

Professional and consultant fees

Total selling, general and administrative expenses

Selling, general and administrative expenses were $36.0 million for the six months ended June 30, 2024, compared to $21.2 million for the six months ended June 30, 2023.

Selling, general and administrative expenses were $49.0 million for the nine months ended September 30, 2024, compared to $34.0 million for the nine months ended September 30, 2023.

The $14.9 million increase in selling, general and administrative expenses was primarily due to the following:

• the increase in personnel-related costs of $8.0 million was primarily due to an increase in headcount-related costs, including an increase in stock-based compensation expense of $5.1 million.

• the increase in personnel related costs was primarily due to an increase in headcount-related costs, including an increase in stock-based compensation expense of $4.0 million that was primarily due to the accelerated vesting of a portion of the outstanding stock options granted to our former Chief Executive Officer, in accordance with the terms of his employment agreement;

• the increase in professional and consultant fees and other costs of $8.2 million and 0.7 million, respectively, was primarily related to the commercialization of PEMGARDA.

Other income was $4.6 million for the six months ended June 30, 2024, consisting primarily of interest earned on our invested cash balances.

Other income was $7.4 million for the six months ended June 30, 2023, consisting primarily of $2.7 million of interest earned on our invested cash balances and $4.7 million of net accretion of discounts related to our marketable securities.

Other income was $6.2 million for the nine months ended September 30, 2024, consisting primarily of interest earned on our invested cash balances.

Other income was $11.0 million for the nine months ended September 30, 2023, consisting primarily of $4.6 million of interest earned on our invested cash balances and $6.4 million of net accretion of discounts related to our marketable securities.

Liquidity and Capital Resources

Sources of Liquidity

Through June 30, 2024, we have incurred significant operating losses and negative cash flows from operations.

Through September 30, 2024, we have incurred significant operating losses and negative cash flows from operations.

Although we received an EUA from the FDA for PEMGARDA in March 2024, we may continue to incur significant expenses and potential operating losses for the foreseeable future as we commercialize PEMGARDA and advance the development of our other product candidates.

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Cantor is entitled to a commission of 3% of the gross proceeds from any sales of such shares.

In February 2024, we sold 9,000,000 shares of our common stock under the Sales Agreement

at an average price of $4.50 per share for $39.3 million in net proceeds.

As of June 30, 2024, $34.5 million remained available for sale under the Sales Agreement.

As of June 30, 2024, we had cash and cash equivalents of $147.9 million.

In February 2024, we sold 9,000,000 shares of our common stock under the Sales Agreement at an average price of $4.50 per share for $39.3 million in net proceeds.

As of September 30, 2024, $34.5 million remained available for sale under the Sales Agreement.

As of September 30, 2024, we had cash and cash equivalents of $106.9 million.

The following table summarizes our sources and uses of cash for each of the periods presented:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Operating Activities

During the six months ended June 30, 2024, operating activities used $91.8 million of cash, primarily due to our net loss of $90.7 million and changes in our operating assets and liabilities of $16.0 million, partially offset by non-cash charges of $14.9 million.

The changes in our operating assets and liabilities primarily consisted of a $15.8 million decrease in accrued expenses, a $2.9 million increase in accounts receivables, a $2.6 million increase in inventory, a $1.6 million increase in other non-current assets, a $0.8 million decrease in operating lease liabilities, a $0.8 million decrease in other non-current liabilities and a $0.6 million decrease in accounts payable, partially offset by a $7.4 million decrease in prepaid expenses and other current assets, and a $1.7 million increase in deferred revenue.

The decrease in accrued expenses was primarily due to the timing of vendor invoicing and payments.

During the nine months ended September 30, 2024, operating activities used $132.9 million of cash, primarily due to our net loss of $151.5 million, partially offset by non-cash charges of $18.3 million and changes in our operating assets and liabilities of $0.3 million.

The changes in our operating assets and liabilities primarily consisted of a $16.0 million increase in accrued expenses, a $15.3 million decrease in prepaid expenses, and a $9.7 million increase in accounts payable, partially offset by a $23.4 million increase in inventory, a $8.1 million increase in accounts receivables, a $7.3 million increase in other non-current assets, a $1.2 million decrease in operating lease liabilities and a $0.7 million decrease in other non-current liabilities.

The increase in accrued expenses was primarily due to the timing of vendor invoicing and payments.

The decrease in prepaid expenses and other current assets was primarily due to the utilization of WuXi Biologics manufacturing prepayments.

During the six months ended June 30, 2023, operating activities used $78.6 million of cash, primarily due to our net loss of $85.5 million, partially offset by non-cash charges of $6.5 million and changes in our operating assets and liabilities of $0.4 million.

The changes in our operating assets and liabilities primarily consisted of a $5.3 million increase in accrued expenses and a $2.6 million increase in accounts payable, partially offset by a $6.6 million decrease in prepaid expenses and other current assets, a $0.8 million decrease in operating lease liabilities and a $0.1 million increase in other non-current assets.

The increase in accounts payable and accrued expenses was primarily due to the timing of vendor invoicing and payments.

The decrease in prepaid expenses and other current assets was primarily due to up-front payments related to our Phase 1 clinical trial for VYD222 and up-front payments to WuXi Biologics for manufacturing costs.

During the nine months ended September 30, 2023, operating activities used $113.9 million of cash, primarily due to our net loss of $125.0 million, partially offset by non-cash charges of $9.6 million and changes in our operating assets and liabilities of $1.5 million.

The changes in our operating assets and liabilities primarily consisted of a $7.7 million increase in accounts payable and a $0.7 million increase in non-current liabilities, partially offset by a $5.5 million decrease in accrued expenses, a $1.2 million decrease in operating lease liabilities, and a $0.3 million increase in prepaid expenses and other current assets.

The increase in accounts payable and decrease in accrued expenses was primarily due to the timing of vendor invoicing and payments.

Investing Activities

Net cash used in investing activities during the six months ended June 30, 2024 consisted of $0.1 million in purchases of property and equipment.

Net cash provided by investing activities during the six months ended June 30, 2023 consisted of $199.4 million in maturities of marketable securities, offset by $91.2 million in purchases of marketable securities and $0.6 million in purchases of property and equipment.

Net cash used in investing activities during the nine months ended September 30, 2024 consisted of $0.1 million in purchases of property and equipment.

Net cash provided by investing activities during the nine months ended September 30, 2023 consisted of $294.6 million in maturities of marketable securities, offset by $91.2 million in purchases of marketable securities and $0.6 million in purchases of property and equipment.

Financing Activities

Net cash provided by financing activities during the six months ended June 30, 2024 consisted of $39.3 million from the issuance of common stock under the Sales Agreement, $0.2 million from exercises of stock options, $0.2 million from the issuance of common stock under the employee stock purchase plan, offset by $0.4 million in payments for offering costs related to the Sales Agreement.

Net cash provided by financing activities during the six months ended June 30, 2023 consisted of $0.7 million from exercises of stock options and $0.1 million from the issuance of common stock under the employee stock purchase plan.

Net cash provided by financing activities during the nine months ended September 30, 2024 consisted of $39.3 million from the issuance of common stock under the Sales Agreement, $0.3 million from exercises of stock options, and $0.2 million from the issuance of common stock under the employee stock purchase plan, offset by $0.5 million in payments for offering costs related to the Sales Agreement.

Net cash provided by financing activities during the nine months ended September 30, 2023 consisted of $0.7 million from exercises of stock options and $0.2 million from the issuance of common stock under the employee stock purchase plan.

Funding Requirements

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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.

Until such time, if ever, as we can generate significant product revenue, we expect to finance our operations through a combination of equity offerings, government or private-party funding or grants, debt financings or other capital sources, such as collaborations with other companies, strategic alliances or licensing arrangements.

We expect to finance our operations through a combination of contribution from revenues, equity offerings, government or private-party grants, debt financings or other capital sources, such as collaborations with other companies, strategic alliances or licensing arrangements to support our continuing operations and pursue our growth strategy.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences and anti-dilution protections that adversely affect your rights as a common stockholder.

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Contractual Obligations and Commitments

Through June 30, 2024, we committed to noncancelable purchase obligations related to commercial drug substance and drug product manufacturing under the Commercial Manufacturing Services Agreement with WuXi Biologics, which was entered into in December 2020, amended and restated in August 2021 and further amended and restated in September 2023 (as amended and restated, the “Commercial Manufacturing Agreement”).

As of June 30, 2024, the total remaining contractually binding commercial drug substance and drug product purchase obligations due to WuXi Biologics was $52.6 million, which is expected to be paid in 2024 and 2025.

As of June 30, 2024, $15.6 million related to the contractually binding commercial drug substance and drug product batches was included in accounts payable and accrued expenses, which is expected to be paid in 2024.

Through June 30, 2024, we committed to noncancelable purchase obligations of $24.7 million related to the procurement of materials to be used in future drug substance and drug product manufacturing under the Commercial Manufacturing Agreement, which is expected to be paid in 2024.

As of June 30, 2024, $6.0 million related to the procurement of materials to be used in future drug substance and drug product manufacturing was included in accounts payable and accrued expenses, which is expected to be paid in 2024.

Through September 30, 2024, we committed to noncancelable purchase obligations related to commercial drug substance and drug product manufacturing under the Commercial Manufacturing Services Agreement with WuXi Biologics, which was entered into in December 2020, amended and restated in August 2021 and further amended and restated in September 2023 (as amended and restated, the “Commercial Manufacturing Agreement”).

As of September 30, 2024, the total remaining contractually binding commercial drug substance and drug product purchase obligations due to WuXi Biologics was $38.3 million, which is expected to be paid in 2024 and 2025.

As of September 30, 2024, $36.5 million related to the contractually binding commercial drug substance and drug product batches was included in accounts payable and accrued expenses, which is expected to be paid in 2024.

Through September 30, 2024, we committed to noncancelable purchase obligations of $17.0 million related to the procurement of materials to be used in future drug substance and drug product manufacturing under the Commercial Manufacturing Agreement, which is expected to be paid in 2024.

As of September 30, 2024, $10.6 million related to the procurement of materials to be used in future drug substance and drug product manufacturing was included in accounts payable and accrued expenses, which is expected to be paid in 2024.

For additional information, see Note 9 to our condensed consolidated financial statements appearing in this Quarterly Report on Form 10-Q.

Other than the above noted transactions, during the three and six months ended June 30, 2024, there were no material changes to our contractual obligations from those described in the 2023 Form 10-K.

Other than the above noted transactions, during the three and nine months ended September 30, 2024, there were no material changes to our contractual obligations from those described in the 2023 Form 10-K.

Critical Accounting Policies and Significant Judgments and Estimates

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis