What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-09 compared with 2021-05-10 · 93 added, 69 removed, 158 unchanged (51% of the section changed)

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These statements relate to future events or to our future operating or financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.

Forward-looking statements appearing in a number of places throughout this Quarterly Report on Form 10-Q include, but are not limited to, statements about the following, among other things:

• the initiation, timing, progress and results of preclinical and clinical trials for B-VEC (previously “KB103”), KB105, KB104, KB407, KB408, KB301 and any other product candidates, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;

• the continuing impact that the COVID-19 pandemic and measures implemented to prevent its spread may have on our business operations, access to capital, research and development activities, and preclinical and clinical trials for B-VEC, KB105, KB104, KB407, KB408, KB301 and any other product candidates;

Some of such factors include, but are not limited to:

• changes in expectations with respect to the initiation, timing, progress and results of preclinical and clinical trials for B-VEC, KB105, KB104, KB407, KB408, KB301 and any other product candidates, including the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs and expenses;

• the timing, scope or results of regulatory filings and approvals, including timing of final US Food and Drug Administration (“FDA”), marketing and other regulatory approval of our product candidates;

• our ability to achieve certain accelerated or orphan drug designations from the FDA;

• our estimates regarding the potential market opportunity for B-VEC, KB105, KB104, KB407, KB408, KB301 and any other product candidates;

• our research and development programs for our product candidates;

• our plans and ability to successfully develop and commercialize our product candidates, including B-VEC, KB105, KB104, KB407, KB408, KB301 and our other product candidates;

• changes in our estimates regarding the potential market opportunity for B-VEC, KB105, KB104, KB407, KB408, KB301 and any other product candidates;

• our ability to raise capital to fund our operations;

• increased costs associated with our research and development programs for our product candidates;

• our general and administrative expenses;

• risks related to our ability to successfully develop and commercialize our product candidates, including B-VEC, KB105, KB104, KB407, KB408, KB301 and our other product candidates;

• our ability to identify and develop new product candidates;

• our ability to identify, recruit and retain key personnel;

• our commercialization, marketing and manufacturing capabilities and strategy;

• the implementation of our business model, strategic plans for our business, product candidates and technology;

• risks related to our commercialization, marketing and manufacturing capabilities and strategy;

• our ability of our business model, strategic plans for our business, product candidates and technology;

• the scalability and commercial viability of our proprietary manufacturing methods and processes;

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• our ability to successfully resolve any intellectual property or other claims that may be brought against us;

• any statements regarding compliance with the listing standards of The NASDAQ Capital Market;

• the impact of laws and regulations;

• any statements regarding economic conditions, including statements related to any future economic volatility or uncertainty related to the COVID-19 pandemic and the impact on our business, or performance and any statement of assumptions underlying any of the foregoing.

• global economic conditions;

• the impact of changes in laws and regulations.

Forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” elsewhere in this Form 10-Q and in other filings we make with the SEC from time to time.

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It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Given these uncertainties, you should not place undue reliance on these forward-looking statements.

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The cell’s own machinery then transcribes and translates the encoded effector to treat or prevent disease.

We formulate our vectors for non-invasive or minimally invasive routes of administration at a doctor’s office or potentially in the patient’s home.

Our goal is to develop easy to use, redosable gene therapies to dramatically improve the lives of patients living with rare diseases.

We formulate our vectors for non-invasive or minimally invasive routes of administration at a doctor’s office or potentially in the patient’s home by a healthcare professional.

Our goal is to develop easy to use, medicines to dramatically improve the lives of patients living with rare diseases.

Our innovative technology platform is supported by in-house, commercial scale cGMP manufacturing capabilities.

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The randomized, double-blind, placebo-controlled GEM-3 pivotal study is ongoing.

On March 30, 2021 we announced completion of patient enrollment, and we expect to announce top line data 4Q21.

On April 26, 2021 we announced modifications to the Statistical Analysis Plan ("SAP") in the ongoing Phase 3 study based on feedback from the FDA.

In the updated plan, the primary outcome measure is complete wound healing determined by the Investigator in B-VEC treated wounds versus placebo.

A positive response is defined as complete wound healing at week 22 and week 24 or week 24 and week 26.

On March 30, 2021, we announced completion of patient enrollment, and we expect to announce top line data in 4Q21.

Details of the pivotal study can be found at www.clinicaltrails.gov under NCT identifier NCT04491604.

Nothing included on these websites shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q.

During 2Q21, we began enrolling patients into an open label extension ("OLE") study, including patients who participated in the Phase 3 study, as well as new participants who meet all enrollment criteria.

Details of the OLE study can be found at www.clinicaltrails.gov under NCT identifier NCT04917874.

Nothing included on this website shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q.

• KB105 is a topical gel containing our novel vector designed to deliver two copies of the TGM1 transgene for the treatment of TGM1-deficient autosomal recessive congenital ichthyosis ("TGM1-ARCI"), a serious rare skin disorder caused by missing or mutated TGM1 protein.

A randomized, placebo-controlled Phase 1/2 study is ongoing.

On July 1, 2021, we announced data from the fourth patient dosed in the trial, showing repeat topical KB105 dosing continued to be well tolerated with no adverse events or evidence of immune response.

Details of the Phase 1/2 study can be found at www.clinicaltrials.gov under NCT identifier NCT04047732.

Nothing included on these websites shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q.

Nothing included on this website shall be deemed incorporated by reference into this Quarterly Report on Form 10-Q.

• KB407 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the full-length CFTR transgene for the treatment of cystic fibrosis, a serious rare lung disease caused by missing or mutated cystic fibrosis transmembrane conductance regulator ("CFTR") protein.

On April 19, 2021 we announced positive preclinical data from the Good Laboratory Practice ("GLP") toxicology and biodistribution study, in which the No-Observed-Adverse-Effect Level ("NOAEL") was determined to be the highest dose tested.

On April 19, 2021, we announced positive preclinical data from the Good Laboratory Practice toxicology and biodistribution study, in which the No-Observed-Adverse-Effect Level was determined to be the highest dose tested.

More detailed data will be presented at the 2021 North American Cystic Fibrosis Conference that will take place September 30 through October 2, 2021.

We expect to initiate clinical testing in 3Q21.

• KB408 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the SERPINA1 transgene, that encodes for normal human alpha-1 antitrypsin ("AAT") protein, for the treatment of alpha-1 antitrypsin deficiency ("AATD").

• KB408 is an inhaled (nebulized) formulation of our novel vector designed to deliver two copies of the SERPINA1 transgene, that encodes for normal human alpha-1 antitrypsin protein, for the treatment of alpha-1 antitrypsin deficiency.

On April 19, 2021, we announced positive initial proof-of-concept preclinical in vitro and in vivo data.

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• KB104 is a topical gel formulation of our novel vector designed to deliver two copies of the SPINK5 transgene for the treatment of Netherton Syndrome, a debilitating autosomal recessive skin disorder caused by missing or mutated SPINK5 protein.

We expect to file an investigational new drug ("IND") in 2H21.

We have several other product candidates in various stages of preclinical development.

• On April 27, 2021, we announced that we will present preclinical data from our vector-encoded-antibody platform in a digital poster presentation at the American Society of Genetic & Cell Therapy (ASGCT) Annual Meeting held virtually May 11-14, 2021.

Data to be presented includes evidence of in vitro molecular efficacy with KB501 (expressing a TNF-α targeting antibody), and in vivo proof-of-concept in two well-established models of atopic dermatitis with KB501 and KB502 (expressing an IL-4Rα targeting antibody).

We are also leveraging the ability of our platform to deliver proteins of interest to cells in the skin in the context of aesthetic medicine via our wholly-owned subsidiary Jeune, Inc.

We expect to initiate a Phase 1 clinical study in 2022.

We are also leveraging the ability of our platform to deliver proteins of interest to cells in the skin in the context of aesthetic medicine via our wholly owned subsidiary Jeune.

A summary description of Jeune’s key product candidate and its status is as follows:

• KB301 is a solution for intradermal injection designed to deliver two copies of the COL3A1 transgene to address signs of aging or damaged skin caused by declining levels of, or damaged proteins within the extracellular matrix, including type III collagen.

• KB301 is a solution formulation of our novel vector for intradermal injection designed to deliver two copies of the COL3A1 transgene to address signs of aging or damaged skin caused by declining levels of, or damaged proteins within the extracellular matrix, including type III collagen.

A Phase 1 study is currently ongoing.

On March 24, 2021 we announced initial data from Cohort 1 of the Phase 1 study that showed safety and tolerability of two (2) repeat KB301 injections in human subjects.

We expect to begin treating patients in an efficacy cohort of the study, as well as announce initial efficacy data in 2H21.

On March 24, 2021, we announced initial data from Cohort 1 on the Phase 1 study that showed safety and tolerability of the two (2) repeat KB301 injections in human subjects.

On August 2, 2021, Jeune announced the dosing of the first patient in the efficacy cohort of the PEARL-1 study.

The efficacy cohort is a randomized, double-blind, saline controlled evaluation of safety and efficacy of KB301 for the improvement of skin quality in approximately 30 subjects.

Bilateral treatment areas on the neck behind the ear, on the cheek, and above the knee will be chosen and randomized on Day 0.

Patients will receive two repeat doses of low dose KB301, high dose KB301, or saline 14 days apart.

Change in skin quality from baseline will be assessed via the Skin Roughness Score, Fine Lines Score, and the Subject Satisfaction Score.

Treatment areas above the knee will be evaluated for change in thickness using a caliper.

Jeune expects to announce initial data from Cohort 2 in 4Q21.

Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT04540900.

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Business Highlights and Recent Developments

• On December 31, 2020, the Company entered into a sales agreement (the "Sales Agreement") with Cowen and Company, LLC ("Cowen") with respect to an at-the-market equity offering program ("ATM Program"), under

which Cowen will act as the Company's agent and/or principal and may issue and sell from time to time, during the term of the Sales Agreement, shares of its common stock, par value $0.0001 per share, having an aggregate offering price up to $150.0 million ("Placement Shares").

Related offering expenses payable by the Company were $172 thousand.

During the first quarter of 2021, we issued 262,500 shares of common stock pursuant to the ATM Program for net proceeds of $16.9 million, resulting in a remaining $132.5 million available for issuance under the ATM Program.

• On January 29, 2021, the Company entered into a PSA for ASTRA with Northfield related to the purchase option exercised by the Company on October 15, 2020 for a purchase price of $9.4 million.

The transaction closed on March 5, 2021.

The Company utilized the $1.5 million deposit with Northfield as a credit against the purchase price and the remaining $7.9 million was paid utilizing cash on hand.

• On February 1, 2021, the Company completed a public offering of 2,211,538 shares of its common stock, including 288,461 shares purchased by the underwriters, at $65.00 per share.

Net proceeds to the Company from the offering were $134.9 million after deducting underwriting discounts and commissions of approximately $8.6 million, and other offering expenses payable by the Company of $198 thousand.

• On March 24, 2021 the Company announced the appointment of Dr.

Bhushan Hardas, M.D., MBA as President of Jeune, Inc., a wholly owned subsidiary of Krystal Biotech.

• On May 3, 2021, the Company announced the appointment of Andy Orth to the position of Chief Commercial Officer of Krystal Biotech.

• In 2Q21, the Company began enrolling patients into an OLE study, including patients who participated in the Phase 3 study, as well as new participants who meet all enrollment criteria.

• On June 30, 2021, the Company entered into a Standard Form of Contract for Construction and the corresponding General Conditions of the Contract for Construction with Whiting-Turner, pursuant to which Whiting-Turner is constructing and managing the construction of ASTRA located in the Pittsburgh, Pennsylvania area.

The 150,000 square foot ASTRA facility is under construction and expected to be completed and validated in 2022.

The Agreement contains certain customary terms and conditions of the parties addressing the Project responsibilities.

Subject to certain conditions in the Agreement, the Company will pay Whiting-Turner a contract price consisting of the cost of work plus a fee equal to 1.75% of the cost of work, subject to a guaranteed maximum price to be agreed upon in an amendment to the Agreement at a later date.

COVID-19 Update

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In an effort to slow the spread of the virus, The Commonwealth of Pennsylvania where the Company’s primary offices, laboratory and manufacturing spaces are located, enacted stay-at-home orders, and sweeping restrictions to travel were initiated by corporations and governments.

Although these restrictions have been lifted in some areas, it is not known at this time whether they will be reestablished or the extent to which the Company will be impacted.

Although these restrictions have been lifted, it is not known at this time whether they will be reestablished or the extent to which the Company will be impacted.

The degree of the pandemic’s effect on the Company’s clinical, operational and financial performance will depend on future developments, including additional protective measures that may be implemented by governmental authorities or the Company to protect its employees, or by investigators, caregivers or patients to minimize exposure, all of which are uncertain and difficult to predict.

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We expect our research and development expenses will increase as we continue the manufacturing of preclinical and clinical materials and manage the clinical trials of, and seek regulatory approval for, our product candidates and expand our product portfolio.

In the near term, we expect that our research and development expenses will increase as we begin our pivotal Phase 3 clinical trial for B-VEC, conduct our ongoing Phase 1/2 clinical trial for KB105, our phase 1 safety study for KB301 and incur preclinical expenses for our other product candidates.

In the near term, we expect that our research and development expenses will increase as we continue with our

pivotal Phase 3 clinical trial for B-VEC, conduct our ongoing Phase 1/2 clinical trial for KB105, conduct our phase 1 safety study for KB301 and incur preclinical expenses for our other product candidates.

Due to the numerous risks and uncertainties associated with product development, we cannot determine with certainty the duration, costs and timing of our clinical trials, and, as a result, the actual costs to complete our clinical trials may exceed the expected costs.

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Additionally, if and when we believe a regulatory approval of our first product candidate appears likely, we anticipate that we will increase our salary and personnel costs and other expenses as a result of our preparation for commercial operations.

ASTRA Capital Expenditures

On March 5, 2021, we closed on the purchase of the building that was constructed to house our second cGMP facility, ASTRA.

We are currently in the process of constructing the interior build-out of this facility and we have entered into a contract with Whiting-Turner who will manage the construction of ASTRA.

Further, we have entered into various non-cancellable purchase agreements for long-lead materials to help avoid potential schedule disruptions or material shortages.

These contracts typically call for the payment of fees for services or materials upon the achievement of certain milestones.

We expect to continue to incur significant capital expenditures related to ASTRA as we construct and validate this facility, which is expected to be completed in 2022.

Interest Income

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Critical Accounting Policies, Significant Judgments and Estimates

There have been no significant changes during the three months ended March 31, 2021 to our critical accounting policies, significant judgments and estimates as disclosed in our management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2020.

There have been no significant changes during the three and six months ended June 30, 2021 to our critical accounting policies, significant judgments and estimates as disclosed in our management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Results of Operations

Three Months Ended March 31, 2021 and 2020

Three Months Ended March 31,

Three Months Ended June 30, 2021 and 2020

Three Months Ended June 30,

2021 2020 Change

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Loss from operations (16,393) (6,954) (9,439)

Interest and other income, net 30 121 (91)

Net loss $ (16,363) $ (6,833) $ (9,530)

Research and Development Expenses

Research and development expenses increased $3.0 million in the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Higher research and development expenses were due to an increase in outsourced research and development activities of approximately $951 thousand, lab supplies of $340 thousand, payroll related expenses of $1.2 million, which is primarily driven by an increase in headcount to support overall growth, and includes a $903 thousand increase in stock-based compensation, and other research and development expenses of $464 thousand, primarily due to depreciation, rent, and other overhead expenses.

General and Administrative Expenses

General and administrative expenses increased $6.5 million in the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $3.4 million, which is primarily driven by an increase in headcount to support overall growth, and includes a $2.5 million increase in stock-based compensation, market research related expenses of approximately $318 thousand, legal and professional fees of approximately $1.6 million and other administrative and professional expenses of $1.1 million.

Interest and other income for the three months ended June 30, 2021 and 2020 was $30 thousand and $121 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

Six Months Ended June 30, 2021 and 2020

Six Months Ended June 30,

2021 2020 Change

(In thousands) (unaudited)

Research and development $ 12,795 $ 7,164 $ 5,631

General and administrative 17,951 5,735 12,216

Total operating expenses 30,746 12,899 17,847

Loss from operations (30,746) (12,899) (17,847)

Other Income (Expense)

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Research and Development Expenses

Research and development expenses increased $2.7 million in the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Higher research and development expenses were due to an increase in outsourcing research and development activities of approximately $1.4 million, lab supplies of $626 thousand, payroll related expenses of $384 thousand, which is primarily driven by an increase in headcount to support overall growth, and includes a $331 thousand increase in stock-based compensation, and other research and development expenses of $307 thousand.

Research and development expenses increased $5.6 million in the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Higher research and development expenses were due to an increase in outsourced research and development activities of approximately $2.3 million, lab supplies of $918 thousand, payroll related expenses of $1.6 million, which is primarily driven by an increase in headcount to support overall growth, and includes a $1.2 million increase in stock-based compensation, and other research and development expenses of $817 thousand, primarily due to depreciation, rent, and other overhead expenses.

General and Administrative Expenses

General and administrative expenses increased $5.7 million in the three months ended March 31, 2021 as compared to the three months ended March 31, 2020.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $2.4 million, which is primarily driven by an increase in headcount to support overall growth, and includes an $1.4 million increase in stock-based compensation, market research related expenses of approximately $1.2 million, legal and professional fees of approximately $1.5 million and other administrative expenses of $670 thousand.

General and administrative expenses increased $12.2 million in the six months ended June 30, 2021 as compared to the six months ended June 30, 2020.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $5.8 million, which is primarily driven by an increase in headcount to support overall growth, and includes a $3.9 million increase in stock-based compensation, market research related expenses of approximately $1.3 million, legal and professional fees of approximately $3.5 million and other administrative expenses of $1.6 million.

Other Income (Expense)

Interest and other income for the three months ended March 31, 2021 and 2020 was $33 thousand and $605 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

This decrease was driven by a decline in market interest rates.

Interest expense for the three months ended March 31, 2021 and 2020 was $1.5 million and zero, respectively, and related to accretion of the financial obligation for the build to suit lease liability during the three months ended March 31, 2021 to a balance that equaled the purchase consideration for ASTRA.

Interest and other income for the six months ended June 30, 2021 and 2020 was $64 thousand and $725 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

Interest expense for the six months ended June 30, 2021 and 2020 was $1.5 million and zero, respectively, and related to accretion of the financial obligation for the build to suit lease liability during the six months ended June 30, 2021 to a balance that equaled the purchase consideration for ASTRA.

Liquidity and Capital Resources

At March 31, 2021, our cash, cash equivalents and short-term investments balance was of approximately $403.4 million.

At June 30, 2021, our cash, cash equivalents and short-term investments balance was approximately $367.7 million.

Since operations began, we have incurred operating losses.

Our net losses were $15.8 million and $5.3 million for the three months ended March 31, 2021 and 2020, respectively.

At March 31, 2021, we had an accumulated deficit of $87.0 million.

With the net proceeds raised from its public and private securities offerings, including the ATM Program and the public offering completed on February 1, 2021, the Company believes that its cash, cash equivalents and short-term investments as of March 31, 2021 will be sufficient to allow the Company to fund its operations for at least 12 months from the filing date of this Form 10-Q.

Our net losses were $16.4 million and $6.8 million for the three months ended June 30, 2021 and 2020 and $32.2 million and $12.2 million for the six months ended June 30, 2021 and 2020, respectively.

At June 30, 2021, we had an accumulated deficit of $103.4 million.

With the net proceeds raised from its public and private securities offerings, including the public offering completed on February 1, 2021 and the ATM Program, the Company believes that its cash, cash equivalents and short-term investments as of June 30, 2021 will be sufficient to allow the Company to fund its operations for at least 12 months from the filing date of this Form 10-Q.

As the Company continues to incur losses, a transition to profitability is dependent upon the successful development, approval and commercialization of our product candidates and the achievement of a level of revenues adequate to support the Company’s cost structure.

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Our funds may not be sufficient to enable us to conduct pivotal clinical trials for, seek marketing approval for or commercially launch B-VEC, KB105, KB301 or any other product candidate.

Accordingly, to obtain marketing approval for and to commercialize this or any other product candidates, we may be required to obtain further funding through public or private equity offerings, debt financings, collaboration and licensing arrangements or other sources.

Accordingly, to obtain marketing approval for and to commercialize these or any other product candidates, we may be required to obtain further funding through public or private equity offerings, debt financings, collaboration and licensing arrangements or other sources.

Adequate additional financing may not be available to us on acceptable terms, if at all.

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The following table summarizes our sources and uses of cash (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash used in operating activities $ (19,783) $ (11,281)

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Net cash provided by financing activities 144,105 117,712

Net increase (decrease) in cash $ 133,903 $ (7,289)

Net increase in cash $ 61,258 $ 104,164

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2021 was $9.7 million and consisted primarily of a net loss of $15.8 million adjusted for non-cash items primarily of depreciation and amortization and stock-based compensation expense of $2.8 million and build to suit interest expense of $1.5 million, as well as cash used by increases in net operating assets of approximately $1.8 million.

Net cash used in operating activities for the three months ended March 31, 2020 was $6.2 million and consisted primarily of a net loss of $5.3 million adjusted for non-cash items of depreciation and amortization and stock-based compensation expense of approximately $951 thousand, and cash provided by decreases in net operating liabilities of $1.8 million.

Net cash used in operating activities for the six months ended June 30, 2021 was $19.8 million and consisted primarily of a net loss of $32.2 million adjusted for non-cash items primarily of depreciation and amortization and stock-based compensation expense of $7.7 million and build to suit interest expense of $1.5 million, as well as cash used by increases in net operating assets of approximately $3.2 million.

Net cash used in operating activities for the six months ended June 30, 2020 was $11.3 million and consisted primarily of a net loss of $12.2 million adjusted for non-cash items of depreciation and amortization and stock-based compensation expense of approximately $2.2 million, and cash provided by decreases in net operating liabilities of approximately $1.3 million.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2021 was $747 thousand and consisted primarily of expenditures of $2.5 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, partially offset by proceeds of $1.7 million received from the maturities of short-term investments.

Net cash used in investing activities for the three months ended March 31, 2020 was $1.3 million and consisted primarily of purchases of $2.0 million of short-term available-for-sale investment securities, and expenditures of $1.5 million on the build-out of our ASTRA facilities, leasehold improvement of new office space, and purchases of computer and laboratory equipment, partially offset by proceeds of $2.2 million received from the maturities of short-term investments.

Net cash used in investing activities for the six months ended June 30, 2021 was $63.1 million and consisted primarily of expenditures of $6.5 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, $59.6 million on the purchase of short-term and long-term investments, partially offset by proceeds of $3.0 million received from the maturities of short-term investments.

Net cash used in investing activities for the six months ended June 30, 2020 was $2.3 million and consisted primarily of purchases of $3.2 million of short-term available-for-sale investment securities, and expenditures of $3.5 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, partially offset by proceeds of $4.4 million received from the maturities of short-term investments.

Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2021 was $144.3 million and consisted primarily of proceeds of $152.3 million received from our ATM Program, a public offering, and exercises of stock options, partially offset by proceeds of $8.0 million used for the purchase of the ASTRA building.

During the three months ended March 31, 2021, pursuant to the ATM Program the Company issued 262,500 share of common stock at a weighted average price of $66.50 per share for net proceeds of $16.9 million after deducting underwriting discounts and commissions of approximately $524 thousand.

The Company also incurred $172 thousand of other offering expenses related to the ATM Program.

Net cash provided by financing activities for the six months ended June 30, 2021 was $144.1 million and consisted primarily of proceeds of $152.1 million received from our public offering, ATM Program and exercises of stock options, partially offset by expenditures of $8.0 million used for the purchase of the ASTRA building.

On February 1, 2021 the Company completed a public offering of 2,211,538 shares of its common stock at $65.00 per share.

Net proceeds to the Company from the offering were $134.9 million after deducting underwriting discounts and commissions of approximately $8.6 million and other offering expenses of approximately $198 thousand.

For the three months ended March 31, 2021, the Company received proceeds of $346 thousand from the exercise of stock options.

Net cash provided by financing activities for the three months ended March 31, 2020 was $243 thousand related to proceeds received from the exercise of stock options.

During the six months ended June 30, 2021, pursuant to the ATM Program the Company issued 262,500 shares of common stock at a weighted average price of $66.50 per share for net proceeds of $16.9 million after deducting underwriting discounts and commissions of approximately $524 thousand.

The Company also incurred $172 thousand of other offering expenses related to the ATM Program.

For the six months ended June 30, 2021, the Company received proceeds of $354 thousand from the exercise of stock options.

Net cash provided by financing activities for the six months ended June 30, 2020 was $117.7 million and was primarily from proceeds from our public offering in May 2020 of 2,275,000 shares of our common stock to the public at $55.00 per share.

Net proceeds to the Company from the offering were $117.2 million after deducting underwriting discounts and commissions of approximately $7.5 million and other offering expenses of approximately $463 thousand, of which $132 thousand was unpaid as of June 30, 2020.

Off-Balance Sheet Arrangements

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We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Beginning with our fiscal year ending December 31, 2022, we will cease to be an emerging growth company.

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