What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-07 compared with 2022-08-08 · 75 added, 71 removed, 166 unchanged (47% of the section changed)

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

• global economic conditions, including the recent rise in inflation;

• global economic conditions, including the recent rise in inflation and interest rates;

• the impact of changes in laws and regulations.

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Throughout this Form 10-Q, unless the context requires otherwise, all references to “Krystal,” “the Company,” we,” “our,” “us” or similar terms refer to Krystal Biotech, Inc., together with its consolidated subsidiaries.

We are a clinical stage biotechnology company leading the field of redosable gene delivery.

We are a biotechnology company focused on developing and commercializing genetic medicines for patients with rare diseases.

Using our patented platform that is based on engineered HSV-1, we create vectors that efficiently deliver therapeutic transgenes to cells of interest in multiple organ systems.

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Pipeline Highlights and Recent Developments

B-VEC is a topical gel containing our novel vector designed to deliver two copies of the COL7A1 transgene for the treatment of dystrophic epidermolysis bullosa ("dystrophic EB"), a serious rare skin disease caused by missing or mutated type VII collagen protein.

Our randomized, double-blind, placebo-controlled GEM-3 pivotal study was designed to evaluate topical B-VEC as compared to placebo in dystrophic EB patients.

Following public announcement of topline data from the GEM-3 study trial on November 29, 2021, we presented more detailed results at the 2022 American Academy of Dermatology Annual Meeting on March 26, 2022 and at the Society of Investigative Dermatology Annual Meeting on May 19, 2022.

On March 28, 2022, we announced that results from the Phase 1 and 2 study of B-VEC were published in Nature Medicine.

In 2Q 2021, 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.

Based on the feedback from the FDA following their review of our human factors validation study report, we announced on April 11, 2022 our plan to offer dystrophic EB patients enrolled in the GEM-3 OLE, the opportunity to be dosed in their homes by a healthcare professional.

On June 22, 2022, we filed a Biologics License Application with the FDA seeking approval of B-VEC for the treatment of patients with dystrophic EB, and we expect to file a Marketing Authorization Application with the European Medicines Agency in 2H 2022.

We can provide no assurances as to whether B-VEC will be approved or the ultimate timing of any approval from either agency.

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

On August 1, 2022, we announced that the FDA had accepted our KB407 Investigational New Drug ("IND") application, and we plan to initiate a Phase 1 clinical study ("CORAL-1/US study") of inhaled KB407 in patients with cystic fibrosis ("CF") in the U.S.

Previously, on September 29, 2021, we announced that the Bellberry Human Research Ethics Committee in Australia granted approval to conduct a Phase 1 clinical study ("CORAL-1/AU study") of inhaled KB407 in patients with CF.

We have begun screening patients for enrollment in the CORAL-1/AU study and plan to initiate dosing in 2H22.

Beremagene geperpavec ("B-VEC"), our lead product candidate is a topical gel containing our novel vector designed to deliver two copies of the COL7A1 transgene for the treatment of dystrophic epidermolysis bullosa ("dystrophic EB" or "DEB").

DEB is a group of heritable skin diseases characterized by skin fragility, blister formation, milia, and scarring that affects approximately 10,000 patients worldwide.

In June 2022, we filed a Biologics License Application ("BLA") with the U.S.

Food and Drug Administration ("FDA") seeking approval of B-VEC for the treatment of patients with dystrophic EB with a request for six-month priority review.

In August 2022, the FDA accepted the BLA and granted priority review with a Prescription Drug User Fee Act target date of February 17, 2023.

In September 2022, we were informed that Vyjuvek (our priority name for B-VEC) was acceptable to the FDA.

In September 2022, we received a positive opinion from the European Medical Agency (EMA) Pediatric Committee on the Pediatric Investigation Plan for B-VEC for the treatment of DEB with no additional studies required.

We also plan to submit a market authorization application, or MAA, to the European Medicines Agency, or the EMA, in Q4 2022.

We have exclusive, worldwide commercialization rights for B-VEC.

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.

We plan to resume dosing in the KB105 Phase 1/2 study later this year.

In July 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.

Faced with competing priorities during the BLA review cycle and initiation of the cystic fibrosis clinical program, the Company anticipates patient dosing in the ongoing Phase 1/2 clinical trial of KB105 for the treatment of TGM1-deficient autosomal recessive congenital ichthyosis in 1H 2023.

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

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 initiate a Phase 1 clinical study in 2022.

We have several other product candidates in various stages of preclinical development as reflected in the chart above.

We expect to initiate a Phase 1 clinical study in the first half of 2023.

In August 2022, we announced that the FDA had accepted our KB407 Investigational New Drug ("IND") application.

We plan to initiate a Phase 1 clinical study ("CORAL-1/US study") of inhaled KB407 in patients with cystic fibrosis ("CF") in the U.S.

in the fourth quarter of 2022.

Details of the Phase 1 study can be found at www.clinicaltrials.gov under NCT identifier NCT05095246.

Previously, in September 2021, we announced that the Bellberry Human Research Ethics Committee in Australia granted approval to conduct a Phase 1 clinical study ("CORAL-1/AU study") of inhaled KB407 in patients with CF.

We have begun screening patients for enrollment in the CORAL-1/AU study and plan to initiate dosing in the fourth quarter of 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 Aesthetics, Inc.

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

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.

Jeune's leading product candidate, KB301, is a 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.

On March 22, 2022, we announced positive proof-of-concept efficacy data from Cohort 2 of the PEARL-1 study of KB301.

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

In Q2 2022, subjects from the PEARL-1 Cohort 2 trial were enrolled in a durability trial to evaluate duration of treatment effect, reduction of the unevenness in placebo treated sites, and long term safety monitoring.

We anticipate announcing data from the durability trial in 2H 2022 and initiating a Phase 2 trial in 4Q 2022 or early 2023.

We anticipate announcing data from the durability trial in Q4 2022.

The Company intends to start a Phase 2 clinical study (PEARL-2) for the treatment of wrinkles and improvements in skin quality attributes in 1H 2023 following agreement with the FDA on measurement of primary efficacy endpoints.

Jeune has several other aesthetic medicine product candidates in various stages of preclinical development as reflected in the chart above.

Business Highlights and Recent Developments

• In October 2022, following our mid-cycle BLA review of B-VEC, we were informed that the FDA does not plan to hold an Advisory Committee meeting and has not identified a need for Risk Evaluation and Mitigation Strategies (REMS) for this application.

• In August 2022, we incorporated Krystal Biotech Netherlands, B.V., for the purpose of establishing operations in Europe.

COVID-19 Update

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We anticipate that our general and administrative expenses will increase in the future to support the continued research and development of our product candidates and to operate as a public company.

These increases will likely include increased

costs for insurance, costs related to the hiring of additional personnel and payments to outside consultants, lawyers and accountants, among other expenses.

These increases will likely include increased costs for insurance, costs related to the hiring of additional personnel and payments to outside consultants, lawyers and accountants, among other expenses.

Additionally, we anticipate that we will increase our salary and personnel costs and other expenses as a result of our preparation for commercial operations.

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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.

We expect to continue to incur significant capital expenditures related to ASTRA as we construct the facility, which is expected to be completed in 1H 2023.

Interest Income

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Critical Accounting Policies, Significant Judgments and Estimates

There have been no significant changes during the three and six months ended June 30, 2022 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, 2021.

There have been no significant changes during the three and nine months ended September 30, 2022 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, 2021.

Results of Operations

Three Months Ended June 30, 2022 and 2021

Three Months Ended June 30,

Three Months Ended September 30, 2022 and 2021

Three Months Ended September 30,

2022 2021 Change

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Research and Development Expenses

Research and development expenses increased $4.3 million in the three months ended June 30, 2022 compared to the three months ended June 30, 2021.

Higher research and development expenses were due to an increase in preclinical, clinical and pre-commercial manufacturing activities of $1.3 million, payroll related expenses of $1.9 million, which were primarily driven by an increase in headcount to support overall growth, and includes a $911 thousand increase in stock-based compensation, outsourced research and development activities of $803 thousand and other research and development expenses of $316 thousand, primarily due to software related costs and rent.

Research and development expenses increased $5.4 million in the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Higher research and development expenses were due to increased preclinical, clinical and pre-commercial manufacturing activities of $635 thousand, increased payroll related expenses of $3.0 million, which were primarily driven by an increase in headcount to support overall growth, and includes a $1.5 million increase in stock-based compensation, an increase in outsourced research and development activities of $1.0 million and increased other research and development expenses of $842 thousand, primarily due to depreciation, license and regulatory fees, and software related costs.

General and Administrative Expenses

General and administrative expenses increased $8.1 million in the three months ended June 30, 2022 as compared to the three months ended June 30, 2021.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $6.5 million, which was primarily driven by an increase in headcount in our executive, commercial, business development and other administrative functions to support overall growth, and includes a $3.1 million increase in stock-based compensation, commercial preparedness expenses of approximately $1.7 million, medical affairs costs of $268 thousand, software related costs of $165 thousand, business development costs of $215 thousand, travel related activities of $136 thousand and other administrative expenses of $460 thousand, primarily due to charitable contributions and conference expenses.

These increases were offset by a net decrease in legal and professional fees of approximately $1.3 million, which includes $68 thousand of insurance proceeds.

General and administrative expenses increased $10.4 million in the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $7.7 million, which was primarily driven by an increase in headcount in our executive, commercial, and other administrative functions to support overall growth, and includes a $3.9 million increase in stock-based compensation, increased commercial preparedness expenses of approximately $922 thousand, a net increase of $804 thousand, which consists of a decreased legal and professional fees of $766 thousand offset by a decrease in litigation proceeds of approximately $1.6 million, due primarily to the settlement of the PeriphaGen litigation, increased travel related activities of $140 thousand, an increase in medical affairs costs of $159 thousand, and increased other administrative expenses of $1.2 million, primarily due to increased utilities, taxes, and IT costs.

These increases were offset by a net decrease in business development costs of $351 thousand and a decrease in software related costs of $202 thousand.

Other Income (Expense)

Interest and other income for the three months ended June 30, 2022 and 2021 was $645 thousand and $30 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

Six Months Ended June 30, 2022 and 2021

Six Months Ended June 30,

Interest and other income for the three months ended September 30, 2022 and 2021 was $1.6 million and $63 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

The increase in interest and dividend income is the result of increased investment activity and increased interest rates.

Nine Months Ended September 30, 2022 and 2021

Nine Months Ended September 30,

2022 2021 Change

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Research and Development Expenses

Research and development expenses increased $7.4 million in the six months ended June 30, 2022 compared to the six months ended June 30, 2021.

Higher research and development expenses were due to an increase in preclinical, clinical and pre-commercial manufacturing activities of $2.5 million, payroll related expenses of $3.5 million, which were primarily driven by an increase in headcount to support overall growth, and includes a $1.8 million increase in stock-based compensation, outsourced research and development activities of $909 thousand and other research and development expenses of $586 thousand, primarily due to software related costs and rent.

These increases were partially offset by a decrease in travel related activities of approximately $61 thousand.

Research and development expenses increased $12.8 million in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Higher research and development expenses were due to an increase in preclinical, clinical and pre-commercial manufacturing activities of $3.2 million, increased payroll related expenses of $6.4 million, which were primarily driven by an increase in headcount to support overall growth, and includes a $3.3 million increase in stock-based compensation, increased outsourced research and development activities of $1.9 million and an increase in other research and development expenses of approximately $1.4 million, primarily due to software related costs and rent and depreciation.

General and Administrative Expenses

General and administrative expenses increased $15.8 million in the six months ended June 30, 2022 as compared to the six months ended June 30, 2021.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $12.2 million, which was primarily driven by an increase in headcount in our executive, commercial, business development and other administrative functions to support overall growth, and includes a $6.4 million increase in stock-based compensation, commercial preparedness expenses of approximately $3.2 million, medical affairs costs of $336 thousand, software related costs of $295 thousand, business development costs of $378 thousand, travel related activities of $189 thousand, and other administrative expenses of $948 thousand, primarily due to rent, taxes, charitable contributions and conference expenses.

These increases were offset by a net decrease in legal and professional fees of approximately $1.7 million, which includes $577 thousand of insurance proceeds.

General and administrative expenses increased $26.2 million in the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021.

Higher general and administrative spending was due largely to increases in payroll related expenses of approximately $19.8 million, which was primarily driven by an increase in headcount in our executive, commercial, business development and other administrative functions to support overall growth, and includes a $10.2 million increase in stock-based compensation, commercial preparedness expenses of approximately $4.1 million, medical affairs costs of $495 thousand, increased travel related activities of $329 thousand, increased software related costs of $92 thousand, and other administrative expenses of $2.2 million, primarily due to rent, utilities, taxes, recruiting and conference expenses.

These increases were offset by a net decrease of $845 thousand, which consists of a decrease in legal and professional fees of $1.8 million offset by an increase in litigation proceeds of approximately $993 thousand, due primarily to the settlement of the PeriphaGen litigation.

Litigation settlement

Litigation settlement for the six months ended June 30, 2022 and 2021 was $25.0 million and zero, respectively, and consisted of the settlement of litigation with PeriphaGen.

Litigation settlement for the nine months ended September 30, 2022 and 2021 was $25.0 million and zero, respectively, and consisted of the settlement of litigation with PeriphaGen.

See "Legal Proceedings" in Note 6 of the notes to condensed consolidated financial statements included in this Form 10-Q for more information.

Other Income (Expense)

Interest and other income for the six months ended June 30, 2022 and 2021 was $902 thousand and $64 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, 2022 and 2021 was zero and $1.5 million, 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.

Interest and other income for the nine months ended September 30, 2022 and 2021 was $2.5 million and $127 thousand, respectively, and consisted of interest and dividend income earned from our cash, cash equivalents and investments.

The increase in interest and dividend income is the result of increased investment activity and increased interest rates.

Interest expense for the nine months ended September 30, 2022 and 2021 was zero and $1.5 million, respectively, and related to accretion of the financial obligation for the build to suit lease liability during the nine months ended September 30, 2021 to a balance that equaled the purchase consideration for ASTRA.

Liquidity and Capital Resources

At June 30, 2022, our cash, cash equivalents and short-term investments balance was approximately $425.6 million.

At September 30, 2022, our cash, cash equivalents and short-term investments balance was approximately $394.4 million.

Since operations began, we have incurred operating losses.

Our net losses were $28.1 million and $78.1 million for the three and six months ended June 30, 2022, respectively, and $16.4 million and $32.2 million for the three and six months ended June 30, 2021, respectively.

At June 30, 2022, we had an accumulated deficit of $218.9 million.

With the net proceeds raised from our previous public and private securities offerings and our ability to issue additional shares under our current ATM program, the Company believes that our cash, cash equivalents and short-term investments as of June 30, 2022 will be sufficient to allow the Company to fund 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.

Our net losses were $29.9 million and $107.9 million for the three and nine months ended September 30, 2022, respectively, and $15.6 million and $47.8 million for the three and nine months ended September 30, 2021, respectively.

At September 30, 2022, we had an accumulated deficit of $248.7 million.

With the net proceeds raised from our previous public and our ability to issue additional shares under our current ATM program, we believe that our cash, cash equivalents and short-term investments as of September 30, 2022 will be sufficient to allow us to fund operations for at least 12 months from the filing date of this Form 10-Q.

As we continue 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 our cost structure.

Furthermore, we expect to incur increasing costs associated with satisfying regulatory and quality standards, maintaining product and clinical trials, and furthering our efforts around our current and future product candidates.

The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital or obtain financing from other sources.

Costs related to clinical trials can be unpredictable and therefore there can be no guarantee that we will have sufficient capital to fund our continued clinical studies of B-VEC, KB105, KB301 or our planned preclinical studies for our other product candidates, or our operations.

We may never achieve profitability, and unless and until we do, we will continue to need to raise additional capital or obtain financing from other sources.

Costs related to clinical trials can be unpredictable and therefore there can be no guarantee that we will have sufficient capital to fund our continued clinical studies of B-VEC, KB105, KB301 or our planned clinical and preclinical studies for our other product candidates, or our operations.

Further, we do not expect to generate any product revenues until 1Q 2023, at the earliest, assuming we receive marketing approval for B-VEC on the schedule we currently contemplate.

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Additionally, we currently utilize third-party contract research organizations to carry out some of our clinical development activities.

As we seek to obtain regulatory approval for any of our product candidates, we expect to continue to incur significant commercialization expenses as we prepare for product sales, marketing, manufacturing, and distribution.

As we seek to obtain regulatory approval for any of our product candidates, we expect to continue to incur significant manufacturing and commercialization expenses as we prepare for product sales, marketing, commercial manufacturing, packaging, labeling and distribution.

Furthermore, pursuant to our settlement agreement with PeriphaGen, we will be required to pay $12.5 million upon the approval of our first product by the FDA, followed by three additional $12.5 million contingent milestone payments upon reaching $100.0 million in total cumulative sales, $200.0 million in total cumulative sales and $300.0 million in total cumulative sales.

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Sources and Uses of Cash

The following table summarizes our sources and uses of cash for the six months ended June 30, 2022 (in thousands):

Six Months Ended June 30,

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2022 (in thousands):

Nine Months Ended September 30,

Net cash used in operating activities (78,240) (27,038)

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Operating Activities

Net cash used in operating activities for the six months ended June 30, 2022 was $58.6 million and consisted primarily of a net loss of $78.1 million adjusted for non-cash items primarily comprised of depreciation and amortization and stock-based compensation expense of $16.4 million, and including net changes in operating assets and liabilities of approximately $3.1 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 comprised of depreciation and amortization and stock-based compensation expense of approximately $7.7 million and build to suit interest expense of $1.5 million, including net changes in operating assets and liabilities of approximately $3.2 million.

Net cash used in operating activities for the nine months ended September 30, 2022 was $78.2 million and consisted primarily of a net loss of $107.9 million adjusted for non-cash items primarily comprised of depreciation and amortization and stock-based compensation expense of $26.4 million, and including net changes in operating assets and liabilities of approximately $3.2 million.

Net cash used in operating activities for the nine months ended September 30, 2021 was $27.0 million and consisted primarily of a net loss of $47.8 million adjusted for non-cash items primarily comprised of depreciation and amortization and stock-based compensation expense of approximately $11.9 million and build to suit interest expense of $1.5 million, including net changes in operating assets and liabilities of approximately $7.1 million.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2022 was $94.1 million and consisted primarily of expenditures of $33.7 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, $147.3 million on the purchase of short-term and long-term investments, partially offset by proceeds of $86.8 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 nine months ended September 30, 2022 was $108.9 million and consisted primarily of expenditures of $47.8 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, $214.7 million on the purchase of short-term and long-term investments, partially offset by proceeds of $153.6 million received from the maturities of short-term investments.

Net cash used in investing activities for the nine months ended September 30, 2021 was $100.2 million and consisted primarily of expenditures of $27.5 million on the build-out of our ASTRA facility, leasehold improvement of new office space, and purchases of computer and laboratory equipment, $83.8 million on the purchase of short-term and long-term investments, partially offset by proceeds of $11.0 million received from the maturities of short-term investments.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2022 was $30.2 million and consisted primarily of proceeds of $30.8 million received from our ATM Program and exercises of stock options and offset by $649 thousand used for the employee tax withholding payment for settlement of vested restricted stock awards.

During the six months ended June 30, 2022, the Company issued and sold 434,782 shares of common stock at a weighted average price of $69.00 per share for net proceeds of $29.1 million after deducting underwriting discounts and commissions of approximately $900 thousand.

For the six months ended June 30, 2022, the Company received proceeds of $1.7 million from the exercise of stock options.

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

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 $360 thousand from the exercise of stock options.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

Contractual Obligations

There have been no material changes to our contractual obligations as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 other than as described in Note 6 “Commitments and Contingencies” of our condensed consolidated financial statements on this Form 10-Q.

Net cash provided by financing activities for the nine months ended September 30, 2022 was $32.3 million and consisted primarily of proceeds of $32.9 million received from our ATM Program and exercises of stock options and offset by $649 thousand used for the employee tax withholding payment for settlement of vested restricted stock awards.

During the nine months ended September 30, 2022, we issued and sold 434,782 shares of common stock at a weighted average price of $69.00 per share for net proceeds of $29.1 million after deducting underwriting discounts and commissions of approximately $900 thousand.

For the nine months ended September 30, 2022, we received proceeds of $3.6 million from the exercise of stock options.

Net cash provided by financing activities for the nine months ended September 30, 2021 was $145.6 million and consisted primarily of proceeds of $153.6 million received from our ATM Program, a public offering, and exercises of stock options, partially offset by $8.0 million used for the purchase of the ASTRA building.

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

Net proceeds 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.

During the nine months ended September 30, 2021, pursuant to the ATM Program we 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.

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

For the nine months ended September 30, 2021, we received proceeds of $1.9 million from the exercise of stock options.

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