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We have completed a Phase 1 clinical trial in healthy volunteers and AV-101 was generally well-tolerated with no serious adverse events reported.
−Removed: We are enrolling patients in Inhaled iMatinib Pulmonary Arterial Hypertension Clinical Trial (IMPAHCT), our global Phase 2b/Phase 3 trial of AV-101 in adults with PAH, and we have assembled a team with deep expertise in developing innovative PAH and inhaled therapies and commercializing novel drugs.
+Added: In November 2023, we completed enrollment in the Phase 2b portion and enrolled our first patient in the Phase 3 portion of Inhaled iMatinib Pulmonary Arterial Hypertension Clinical Trial (IMPAHCT), our global Phase 2b/Phase 3 trial of AV-101 in adults with PAH.
+Added: We have assembled a team with deep expertise in developing innovative PAH and inhaled therapies and commercializing novel drugs.
We do not have any products approved for sale and have incurred significant operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future.
Recent Developments
−Removed: Initial Public Offering
−Removed: In July 2021, we completed our initial public offering, or IPO, of 9,984,463 shares of our common stock at a price to the public of $14.00 per share, including the exercise in full by the underwriters of their option to purchase 1,302,321 additional shares of our common stock.
−Removed: Including the option exercise, our aggregate net proceeds from the offering were $126.9 million after deducting underwriting discounts and commissions and other offering costs.
−Removed: Immediately prior to the closing of our IPO, all outstanding shares of our redeemable convertible preferred stock were converted into 14,182,854 shares of our common stock.
−Removed: COVID-19 Pandemic and Future Infectious Disease Outbreaks
−Removed: We continue to closely monitor the impact of the COVID-19 pandemic on our business, operations and clinical development timelines.
−Removed: In addition, we are actively monitoring its impact on our clinical trial enrollment, trial sites, contract research organizations, or CROs, third-party manufacturers, and other third parties with whom we do business, as well as its impact on regulatory authorities and our key scientific and management personnel.
−Removed: The ultimate impact of the COVID-19 pandemic or any future infectious disease outbreaks is highly uncertain and subject to change.
−Removed: We continue to actively monitor the impact of infectious disease outbreaks on our business operations and may take future actions that alter our operations, including those that may be required by federal, state or local authorities, or that we determine are in the best interests of our employees and other third parties with whom we do business.
−Removed: The COVID-19 pandemic or any future infectious disease outbreaks may affect our business, operations and clinical development timelines and plans, including the resulting impact on our expenditures and capital needs.
+Added: At-The-Market Offering
+Added: On April 5, 2023, we entered into an ATM Equity Offering SM Sales Agreement, or the Sales Agreement, with BofA Securities, Inc., or the Agent, pursuant to which we established an “at-the-market” offering program, or ATM Program, to sell, from time to time, at our option, up to an aggregate of $75.0 million of shares of our common stock, through the Agent, as our sales agent.
+Added: During the year ended December 31, 2023, 2,662,721 shares were sold under the ATM Program, generating approximately $44.3 million of net proceeds after deducting Agent commissions and other offering costs.
+Added: As of the date of this Annual Report on Form 10-K, approximately $30.0 million of shares remain available for sale from time to time under our ATM Program.
Components of Results of Operations
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We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials and nonclinical studies of AV-101 or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development.
−Removed: Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations.
+Added: Clinical and preclinical development timelines, the
+Added: probability of success and development costs can differ materially from expectations.
We will need to raise substantial additional capital in the future.
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Research and development expenses for the year ended December 31, 2023 were $64.2 million compared to $38.6 million for the year ended December 31, 2022.
−Removed: The increase of $23.6 million was primarily due to increases of $13.5 million in clinical trial costs, $6.8 million in headcount related costs, $3.0 million in manufacturing costs, and $0.9 million in professional fees, partially offset by lower pre-clinical and regulatory related costs of $0.7 million.
+Added: The increase of $25.6 million was primarily due to increases of $12.4 million in headcount related costs, $6.0 million in clinical trial costs, $5.6 million in manufacturing costs, and $1.9 million in other miscellaneous costs including travel and professional services, partially offset by lower pre-clinical and regulatory related costs of $0.3 million.
General and Administrative Expenses
General and administrative expenses for the year ended December 31, 2023 were $17.2 million compared to $14.6 million for the year ended December 31, 2022.
−Removed: The increase of $6.6 million was primarily due to increases of $2.5 million in headcount related costs, $1.7 million in professional services related to other consulting expenses, corporate legal fees and audit and accounting services, $1.2 million in insurance expense and $1.2 million in other operating expenses.
−Removed: Total Other Income (Expense)
+Added: The increase of $2.6 million was primarily due to a $3.2 million increase in headcount related costs and a $0.6 million increase in travel and other miscellaneous costs, offset by decreases of $0.5 million in insurance costs, $0.4 million in recruiting costs, and $0.3 million in consulting costs.
+Added: Total Other Income
Other income for the year ended December 31, 2023 was $5.9 million compared to $1.8 million of other income for the year ended December 31, 2022.
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From our inception through December 31, 2023, we have received aggregate net proceeds of $79.8 million from the sale of shares of our convertible preferred stock and $5.0 million from convertible promissory notes to related parties.
−Removed: In July 2021, we completed our IPO with aggregate net proceeds from the offering of $126.9 million, after deducting underwriting discounts and commissions and offering costs.
+Added: In July 2021, we completed our initial public offering, or IPO, with aggregate net proceeds from the offering of $126.9 million, after deducting underwriting discounts and commissions and offering costs.
At-the-Market Offering
−Removed: On August 15, 2022, we entered into an Open Market Sale Agreement SM , or the Sale Agreement, with Jefferies LLC, or the Agent, pursuant to which we can sell, from time to time, at our option, up to an aggregate of $75.0 million of shares of
−Removed: our common stock, through the Agent, as our sales agent.
−Removed: As of December 31, 2022, no shares were sold under the Sale Agreement.
+Added: On April 5, 2023, we entered into the Sales Agreement with the Agent pursuant to which we can sell, from time to time, at our option, up to an aggregate of $75.0 million of shares of our common stock, through the Agent, as our sales agent.
+Added: During the year ended December 31, 2023, 2,662,721 shares were sold under the ATM Program, generating approximately $44.3 million of net proceeds after deducting Agent commissions and other offering costs.
+Added: Since establishment of our ATM Program, we have sold an aggregate of $44.3 million of shares of our common stock, and up to $30.0 million of shares of our common stock remain available for sale from time to time as of the date of this Annual Report on Form 10-K.
Future Funding Requirements
−Removed: We have prepared operating plans and cash flow forecasts which indicate that our existing cash and cash equivalents and short-term investments on-hand of $129.2 million will be sufficient to fund our planned operations into the second half of 2025.
+Added: We have prepared operating plans and cash flow forecasts which indicate that our existing cash and cash equivalents and short-term investments on-hand of $122.4 million will be sufficient to fund our planned operations into 2026.
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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However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.
−Removed: To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms
−Removed: of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
+Added: To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
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In August 2021, we entered into a lease agreement, or the Waltham Lease, for approximately 5,000 square feet of office space in Waltham, Massachusetts.
−Removed: The base rent under the Waltham Lease is $43.00 per rentable square foot, or approximately $18,000 per month and is subject to scheduled annual increases of $1.00 per rentable square foot during the lease term.
The term of the Waltham Lease is thirty-nine months, unless extended or earlier terminated pursuant to the terms of the Waltham Lease.
−Removed: We have the option to extend the Waltham Lease for one additional period of three years.
+Added: In January 2024, we entered into the First Amendment to the Waltham Lease resulting in our lease expiring on December 31, 2025, and subject to scheduled annual increases of $1.00 per rentable square foot during this additional lease term.
+Added: In obtaining this lease extension, we no longer have the option to extend the Waltham Lease for one additional period of three years.
In April 2022, we entered into a lease agreement, or the Foster City Lease, for approximately 3,500 square feet of office space in Foster City, California.
9 unchanged sentences
Net cash used in operating activities
−Removed: Net cash provided by (used in) investing activities
+Added: Net cash provided by investing activities
Net cash provided by financing activities
−Removed: Net (decrease) increase in cash and cash equivalents
+Added: Net increase (decrease) in cash and cash equivalents
Operating Activities
Net cash used in operating activities for the year ended December 31, 2023 was $56.8 million, consisting primarily of our net loss incurred during the period of $75.5 million adjusted for $8.9 million of noncash charges and $9.7 million for net changes in operating assets and liabilities.
−Removed: Noncash charges consisted primarily of $5.5 million in stock-based
−Removed: compensation expense, partially offset by $0.9 million of amortization of our investments.
−Removed: The net change in operating assets and liabilities related to a $5.0 million increase in accounts payables and accrued liabilities, a $4.7 million increase in prepaid expenses and other current assets, partially offset by a $1.9 million decrease in other long-term assets.
+Added: Noncash charges consisted primarily of $11.9 million in stock-based compensation expense, partially offset by $3.1 million of amortization of our investments.
+Added: The net change in operating assets and liabilities related to a $9.8 million increase in accounts payables and accrued liabilities, a $0.5 million increase in prepaid expenses and other current assets, partially offset by a $0.4 million decrease in liabilities and $0.1 million decrease in other long-term assets.
Net cash used in operating activities for the year ended December 31, 2022 was $39.1 million, consisting primarily of our net loss incurred during the period of $51.5 million adjusted for $4.6 million of noncash charges and $7.8 million for net changes in operating assets and liabilities.
−Removed: Noncash charges consisted primarily of $2.0 million in stock-based compensation expense.
−Removed: The net change in operating assets and liabilities related to a $6.8 million increase in prepaid expenses and other current assets and a $0.3 million increase in other long-term assets, partially offset by a $0.6 million increase in accounts payable.
+Added: Noncash charges consisted primarily of $5.5 million in stock-based compensation expense, partially offset by $0.9 million of amortization of our investments.
+Added: The net change in operating assets and liabilities related to a $5.0 million increase in accounts payables and accrued liabilities, a $4.7 million increase in prepaid expenses and other current assets, partially offset by a $1.9 million decrease in other long-term assets.
Investing Activities
+Added: Net cash provided by investing activities for the year ended December 31, 2023 of $11.9 million consisted of maturities of short-term investments of $136.0 million, offset by purchases of short-term investments of $124.0 million and $0.1 million for purchases of property and equipment.
Net cash provided by investing activities for the year ended December 31, 2022 of $6.9 million was comprised of sales and maturities of investments of $154.7 million, offset by purchase of short-term investments of $147.6 million and purchases of property and equipment of $0.2 million to support our research activities and leasehold improvements, furniture and fixtures for our office spaces in Waltham, Massachusetts and Foster City, California.
−Removed: Net cash used by investing activities for the year ended December 31, 2021 of $113.4 million was comprised of purchases of short-term investments of $113.2 million using the proceeds from our initial public offering in July 2021 and purchases of property and equipment of $0.2 million for purchases of property and equipment to support our research activities and leasehold improvements, furniture and fixtures for our office space in Waltham, Massachusetts.
Financing Activities
+Added: Net cash provided by financing activities for the year ended December 31, 2023 consisted of $44.9 million in net proceeds received from sales of common stock under the Sales Agreement, after deducting Agent commissions, $1.3 million of proceeds from stock option exercises and issuances of common stock under our employee stock purchase plan, offset by $0.2 million of payments made for offering costs.
Net cash provided by financing activities for the year ended December 31, 2022 was $0.4 million due to $0.8 million in net proceeds received from stock option exercises and issuances of common stock under our employee stock purchase plan, which were partially offset by $0.4 million of payments made for offering costs.
−Removed: Net cash provided by financing activities for the year ended December 31, 2021 was $190.5 million due to $63.6 million in net proceeds received from the First Milestone Closing, Second Milestone Closing and Third Milestone Closing of Series A redeemable convertible preferred stock, net of issuance of costs, and $126.9 million in net proceeds from the issuance of common stock, net of issuance costs, in connection with the closing of the Company’s IPO on July 2, 2021.
Critical Accounting Policies 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.