Financial Statements (unaudited)
−Removed: Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022
−Removed: Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2023 and 2022
−Removed: Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2023 and 2022
−Removed: Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022
+Added: Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022
+Added: Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2023 and 2022
+Added: Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended June 30, 2023 and 2022
+Added: Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022
Notes to Condensed Consolidated Financial Statements
34 unchanged sentences
5,000,000 shares authorized
−Removed: as of March 31, 2023 and December 31, 2022;
+Added: as of June 30, 2023 and December 31, 2022;
no shares issued and
−Removed: outstanding as of March 31, 2023 and December 31, 2022
+Added: outstanding as of June 30, 2023 and December 31, 2022
Common stock, $ 0.001 par value per share;
115,000,000 shares
−Removed: authorized as of March 31, 2023 and December 31, 2022;
+Added: authorized as of June 30, 2023 and December 31, 2022;
43,269,200 shares issued and outstanding as of
−Removed: March 31, 2023 and December 31, 2022
+Added: June 30, 2023 and December 31, 2022
Additional paid-in capital
Accumulated deficit
−Removed: Accumulated other comprehensive loss
+Added: Accumulated other comprehensive gain (loss)
Total stockholders’
4 unchanged sentences
(In thousands, except share and per share data)
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Operating expenses:
7 unchanged sentences
Comprehensive loss:
−Removed: Other comprehensive gain:
−Removed: Unrealized gain on marketable securities
−Removed: Total other comprehensive gain
+Added: Other comprehensive gain (loss):
+Added: Unrealized gain (loss) on marketable securities
+Added: Total other comprehensive gain (loss)
Total comprehensive loss
10 unchanged sentences
Balances as of March 31, 2023
+Added: Stock-based compensation expense
+Added: Unrealized gain on marketable securities
+Added: Balances as of June 30, 2023
Comprehensive
3 unchanged sentences
Balances as of March 31, 2022
+Added: Stock-based compensation expense
+Added: Unrealized loss on marketable securities
+Added: Balances as of June 30, 2022
The accompanying notes are an integral part of these condensed consolidated financial statements.
2 unchanged sentences
(In thousands)
−Removed: Three Months Ended March 31,
+Added: Six Months Ended June 30,
Cash flows from operating activities:
10 unchanged sentences
Cash flows from investing activities:
−Removed: Maturities and sales of marketable debt securities
−Removed: Net cash provided by investing activities
+Added: Purchase of property and equipment
+Added: Purchase of marketable securities
+Added: Maturities and sales of marketable securities
+Added: Net cash provided by (used in) investing activities
Cash flows from financing activities:
Net cash provided by financing activities
−Removed: Net increase in cash, cash equivalents and restricted cash
+Added: Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period
Cash, cash equivalents and restricted cash at end of period
−Removed: Supplemental disclosure of non-cash investing and financing activities:
−Removed: Purchases of property and equipment included in accounts payable and accrued expenses
The accompanying notes are an integral part of these condensed consolidated financial statements.
6 unchanged sentences
FA is a rare, progressive and fatal disease in which patients are unable to produce sufficient FXN due to a genetic abnormality.
−Removed: In May 2021, Larimar reported positive top-line data from its Phase 1 FA program after completing dosing of the single ascending dose ("SAD") trial in December 2020 and of the multiple ascending dose ("MAD") trial in March 2021.
−Removed: Also in May 2021, the U.S.
−Removed: Food and Drug Administration ("FDA") placed a clinical hold on the Company's CTI-1601 clinical program after the Company notified the agency of mortalities at the highest dose levels of a 26-week non-human primate toxicology study that was designed to support extended dosing of patients with CTI-1601.
−Removed: At the time the hold was placed, Larimar had no interventional clinical trials with patients enrolling or enrolled.
−Removed: In February 2022, in response to the complete response the Company submitted, the FDA stated that it was maintaining the clinical hold and that additional data were needed to resolve the clinical hold.
−Removed: The Company subsequently submitted a request to the FDA for a Type C meeting, which was granted and was held in July 2022.
−Removed: The Company submitted a complete response to the FDA incorporating additional information requested by the FDA at the meeting as well as information on a proposed dose exploration study in August 2022.
−Removed: In September 2022, following the Type C meeting and the submission of the Company's complete response, the FDA allowed the 25 mg cohort of a Phase 2, four-week, placebo-controlled, dose exploration trial of CTI-1601 in FA patients to proceed.
−Removed: In connection with this decision, the FDA lifted its full clinical hold on the CTI-1601 clinical development program and imposed a partial clinical hold.
−Removed: The dose exploration trial is designed to further characterize CTI-1601’s safety, PD and PK profiles to provide information about the long-term dose and dose regimen.
−Removed: In May, 2023, Larimar reported preliminary top-line data from the 25 mg cohort of its Phase 2 four-week, placebo controlled dose exploration trial of CTI-1601 in FA patients and announced that it had submitted this data to the FDA.
−Removed: Larimar has a meeting scheduled with the Agency later this quarter to discuss the information needed to gain clearance to initiate a 50 mg cohort in the Phase 2 trial.
−Removed: Larimar expects to provide an update on the next steps for the CTI-1601 program in the third quarter of 2023, after it has received feedback from the upcoming FDA meeting.
−Removed: The Company is subject to risks and uncertainties common to pre-commercial companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with governmental regulations, failure to secure regulatory approval for its drug candidates or any other product candidates and the ability to secure additional capital to fund its operations.
+Added: The Company has completed two phase 1 studies of CTI-1601 and the first cohort of a Phase 2 in patients with FA.
+Added: In May 2021, after reporting positive top-line data from the Company’s Phase 1 FA program, the U.S.
+Added: Food and Drug Administration (“FDA”) placed a clinical hold on the Company’s CTI-1601 clinical program after the Company notified the Agency of mortalities at the highest dose levels of a 26-week non-human primate toxicology study that was designed to support extended dosing of patients with CTI-1601.
+Added: In August 2022, the Company submitted a complete response to the clinical hold, following a Type C Meeting with the FDA, and proposed as CTI-1601’s next clinical trial a Phase 2, four-week, dose exploration study in FA patients starting at the lower dose levels tested in the Company’s Phase 1 multiple-ascending dose clinical trial.
+Added: In September 2022, the FDA lifted its full clinical hold on the CTI-1601 program and imposed a partial clinical hold.
+Added: In May 2023, the Company announced top-line data from its completed a 25 mg cohort of a Phase 2, four-week, dose exploration trial of CTI-1601 in patients with FA and provided a complete response to the FDA in June 2023, which included unblinded safety, pharmacokinetic ("PK"), and pharmacodynamic data from the Phase 2 trial’s completed 25 mg cohort.
+Added: Data from the completed 25 mg cohort (n = 13) indicated that CTI-1601 was generally well tolerated and showed increases in FXN levels from baseline compared to placebo in all evaluated tissues (skin and buccal cells) at day 14 (the final day of daily dosing in the trial).
+Added: In June 2023, the Company met with the FDA.
+Added: Following that meeting, the Company submitted a complete response to the FDA’s partial clinical hold that included unblinded safety, pharmacokinetic (“PK”) and frataxin data from the Phase 2 trial’s completed 25 mg cohort.
+Added: In July 2023, the FDA cleared the Company’s four-week, placebo-controlled, Phase 2 dose exploration trial of CTI-1601 in patients with FA to proceed to a 50 mg cohort in which participants will be dosed daily for the first 14 days, and then every other day until day 28.
+Added: Additionally, the FDA cleared for initiation the Company’s open label extension (“OLE”) trial in which participants will receive 25 mg of CTI-1601 daily.
+Added: Further dose escalation in the Phase 2 and OLE trials and the initiation of additional U.S.
+Added: clinical trials evaluating CTI-1601 are contingent on FDA review of results from the Phase 2 trial’s 50 mg cohort in accordance with a partial clinical hold.
+Added: The Company is subject to risks and uncertainties common to pre-commercial companies in the biotechnology industry, including, but not limited to, development and commercialization by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with governmental regulations, failure to secure regulatory approval for its drug candidates or any other product candidates and the ability to secure additional capital to fund its operations.
Product candidates currently under development will require extensive non-clinical and clinical testing and regulatory approval prior to commercialization.
6 unchanged sentences
The condensed consolidated balance sheet as of December 31, 2022 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP.
−Removed: The accompanying unaudited condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023
−Removed: and 2022, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.
+Added: The accompanying unaudited condensed consolidated financial statements as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.
−Removed: However, the Company believes that the disclosures are adequate to make the information presented not misleading.
−Removed: These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2023.
−Removed: In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position as of March 31, 2023, condensed consolidated results of operations for the three months ended March 31, 2023 and condensed consolidated statement of cash flows for the three months ended March 31, 2023 have been made.
−Removed: The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2023 .
+Added: However, the Company believes that the disclosures are adequate to make the
+Added: information presented not misleading.
+Added: These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2023 and the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2023.
+Added: In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position as of June 30, 2023, condensed consolidated results of operations for the three and six months ended June 30, 2023 and 2022 and condensed consolidated statement of cash flows for the six months ended June 30, 2023 and 2022 have been made.
+Added: The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2023 .
Liquidity and Capital Resources
1 unchanged sentence
Since its inception, the Company has incurred significant recurring operating losses and negative cash flows from operations.
−Removed: The Company has incurred net losses of $ 6.5 million and $ 8.9 million for the three months ended March 31, 2023 and 2022, respectively.
−Removed: In addition, as of March 31, 2023, the Company had an accumulated deficit of $ 158.1 million .
+Added: The Company has incurred net losses of $ 14.9 million and $ 17.6 million for the six months ended June 30, 2023 and 2022, respectively.
+Added: In addition, as of June 30, 2023, the Company had an accumulated deficit of $ 166.5 million .
The Company expects to continue to generate operating losses for the foreseeable future.
−Removed: As of March 31, 2023, the Company had approximately $ 111.5 million of cash and cash equivalents available for use to fund its operations and capital requirements.
+Added: As of June 30, 2023, the Company had approximately $ 104.2 million of cash, cash equivalents and marketable securities available for use to fund its operations and capital requirements.
The Company has funded its operations to date primarily with proceeds from sales of common stock and proceeds from the sale of prefunded warrants for the purchase of common stock, the acquisition in 2020 of cash, cash equivalents, marketable securities and restricted cash upon the merger with Zafgen, Inc.
1 unchanged sentence
In accordance with Accounting Standards Update (“ASU”) No.
−Removed: 2014-15, " Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ", the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.
−Removed: As of the issuance date of these condensed consolidated financial statements, the Company expects its cash and cash equivalents will be sufficient to fund its forecasted operating expenses and capital expenditure requirements, for at least twelve months from the issuance of these condensed consolidated financial statements.
+Added: 2014-15, " Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern ", the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued.
+Added: As of the issuance date of these condensed consolidated financial statements, the Company expects its cash, cash equivalents and marketable securities will be sufficient to fund its forecasted operating expenses and capital expenditure requirements, for at least twelve months from the issuance of these condensed consolidated financial statements.
If the timing of the Company's clinical assumptions are delayed or if there are other forecasted assumption changes that negatively impact its operating plan, the Company could reduce expenditures in order to further extend cash resources.
1 unchanged sentence
The Company expects that its research and development and general and administrative expenses will continue to increase and, as a result, that it will need additional capital to fund its future operating and capital requirements.
−Removed: Until the Company can generate substantial revenue, if ever, management continuously evaluates different strategies to obtain the required funding for future operations.
−Removed: These strategies include seeking additional funding through a combination of public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.
+Added: Unless and until the Company can generate substantial revenue, management continuously evaluates different strategies to obtain the required funding for future operations.
+Added: These strategies include seeking additional funding through a combination of public or private equity offerings, debt financings, collaborations and licensing arrangements, strategic partnerships with pharmaceutical and/or larger biotechnology companies, or other sources.
The incurrence of indebtedness would result in increased fixed payment obligations and the Company may be required to agree to certain restrictive covenants, such as limitations on its ability to incur additional debt, limitations on its ability to acquire, sell or license intellectual property rights, minimum required cash balances and other operating restrictions that could adversely impact the Company's ability to conduct its business.
3 unchanged sentences
The Company could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and it may be required to relinquish rights to some of its technologies or product candidates or otherwise agree to terms unfavorable to it, any of which may have a material adverse effect on the Company's business, operating results and prospects.
−Removed: In addition, geopolitical tensions, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, bank instability and the ability of the U.S.
+Added: In addition, geopolitical tensions, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, bank instability and the ability of the U.S.
government to manage federal debt limits as well as the potential impact of other health crises on the global financial markets may reduce the Company's ability to access capital, which could negatively affect its liquidity and ability to continue as a going concern.
16 unchanged sentences
Stock-Based Compensation
−Removed: The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of grant using the Black-Scholes option-pricing model.
+Added: The Company measures all stock-based awards granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model.
Compensation expense of those awards is recognized over the requisite service period, which is the vesting period of the respective award.
4 unchanged sentences
Prior to January 1, 2023, the Company estimated its expected common stock price volatility solely based on the historical volatility of publicly traded peer companies.
−Removed: Beginning on January 1, 2023, based on the availability of sufficient historical trading data of the Company's own common stock on the Nasdaq Global Market was now available to calculate accurately its volatility, the Company began blending its volatility starting from June 2020 (following its merger with Zafgen in 2020) to the date of each stock-based award, and weighing the volatility of its peer group for the amount of time from May 31, 2020 backwards so that the blended volatility equals the expected term of the related stock-based award.
+Added: Beginning on January 1, 2023, based on the availability of sufficient historical trading data of the Company's own common stock on the Nasdaq Global Market to calculate accurately its volatility, the Company began blending its volatility starting from June 2020 (following its merger with Zafgen in 2020) to the date of each stock-based award, and weighing the volatility of its peer group for the amount of time from May 31, 2020 backwards so that the blended volatility equals the expected term of the related stock-based award.
The expected term of the Company’s stock options has been determined utilizing the “simplified”
6 unchanged sentences
Basic shares outstanding includes the weighted average effect of the Company’s prefunded warrants issued in June 2020, the exercise of which requires little or no consideration for the delivery of shares of common stock.
−Removed: Basic and diluted weighted average shares of common stock outstanding for the three months ended March 31, 2023 and 2022 includes the weighted average effect of 628,403 prefunded warrants for the purchase of shares of common stock, for which the remaining unfunded exercise price is $ 0.01 per share.
−Removed: Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares, including potentially dilutive common shares assuming the dilutive effect of outstanding stock options, outstanding restricted stock units, and unvested restricted common shares, as determined using the treasury stock method.
−Removed: For periods in which the Company has reported net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is antidilutive.
−Removed: The Company excluded 4,974,521 and 3,078,511 common stock equivalents outstanding as of March 31, 2023 and 2022, respectively, from the computation of diluted net loss per share for the three months ended March 31, 2023 and 2022 because they had an anti-dilutive impact due to the net loss incurred for the periods presented.
+Added: Basic and diluted weighted average shares of common stock outstanding for the three and six months ended June 30, 2023 and 2022 includes the weighted average effect of 628,403 prefunded warrants for the purchase of shares of common stock, for which the remaining unfunded exercise price is $ 0.01 per share.
+Added: Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares, including potentially dilutive common stock equivalents assuming the dilutive effect of outstanding stock options, outstanding restricted stock units, and unvested restricted common shares, as determined using the treasury stock method.
+Added: For periods in which the Company has reported net losses (all periods since inception), diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, since dilutive common stock equivalents are not assumed to have been issued if their effect is antidilutive.
+Added: The Company excluded 5,129,327 and 3,130,370 common stock equivalents outstanding as of June 30, 2023 and 2022, respectively, from the computation of diluted net loss per share for the three and six months ended June 30, 2023 and 2022 because they had an anti-dilutive impact due to the net loss incurred for the periods presented.
Recently Issued and Adopted Accounting Pronouncements
1 unchanged sentence
We have assessed the recently issued guidance that is not yet effective and believe the new guidance will not have a material impact on the condensed consolidated results of operations, cash flows or financial position.
−Removed: Fair Value Measurements and Marketable debt securities
+Added: Fair Value Measurements and Marketable Securities
Fair Value Measurements
−Removed: The Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 are measured in accordance with the standards of ASC 820, " Fair Value Measurements and Disclosures" , which establishes a three-level valuation hierarchy for measuring fair value and expands financial statement disclosures about fair value measurements.
+Added: The Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 are measured in accordance with the standards of ASC 820, " Fair Value Measurements and Disclosures" , which establishes a three-level valuation hierarchy for measuring fair value and expands financial statement disclosures about fair value measurements.
The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date.
7 unchanged sentences
The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts payable and accrued liabilities.
−Removed: For accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of March 31, 2023 and December 31, 2022 were considered representative of their fair values due to their short term to maturity.
−Removed: The following tables summarize the Company’s cash equivalents as of March 31, 2023 and its cash equivalents and marketable securities as of December 31, 2022 (The Company had no marketable securities as of March 31, 2023):
+Added: For accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of June 30, 2023 and December 31, 2022 were considered representative of their fair values due to their short term to maturity.
+Added: The following tables summarize the Company’s cash equivalents and marketable securities as of June 30, 2023 and December 31, 2022.
(in thousands)
−Removed: March 31, 2023
+Added: June 30, 2023
Cash equivalents:
Money market funds invested in government securities
+Added: U.S Treasury bills
+Added: Corporate bonds
Total cash equivalents
+Added: Marketable securities:
+Added: U.S Treasury bills
+Added: Total marketable securities
+Added: Total cash equivalents and marketable securities
December 31, 2022
6 unchanged sentences
Total cash equivalents and marketable securities
−Removed: The accrued interest receivable related to the Company’s investments was $ 0.3 million and $ 0.1 million as of March 31, 2023 and December 31, 2022, respectively, and is included in prepaid expenses and other current assets on the condensed consolidated balance sheet.
−Removed: The Company classifies its money market funds, which are valued based on quoted market prices in active markets with no valuation adjustment, as Level 1 assets within the fair value hierarchy.
+Added: The accrued interest receivable related to the Company’s investments was $ 0.3 million and $ 0.1 million as of June 30, 2023 and December 31, 2022, respectively, and is included in prepaid expenses and other current assets on the condensed consolidated balance sheet.
+Added: The Company classifies its money market funds and U.S.
+Added: treasury bills, which are valued based on quoted market prices in active markets with no valuation adjustment, as Level 1 assets within the fair value hierarchy.
The Company classifies its investments in U.S.
−Removed: treasury securities, corporate commercial paper, and corporate debt securities, if any, as Level 2 assets within the fair value hierarchy.
+Added: government and agency securities, corporate commercial paper, and corporate bonds, if any, as Level 2 assets within the fair value hierarchy.
The fair values of these investments are estimated by taking into consideration valuations obtained from third-party pricing services.
1 unchanged sentence
These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.
−Removed: As of March 31, 2023 , the Company had no unrealized gains or losses related to available-for-sale investments.
As of December 31, 2022, the unrealized losses for available-for-sale investments were non-credit related, and the Company does not intend to sell the investments that were in an unrealized loss position, nor will it be required to sell those investments before recovery of their amortized cost basis, which may be maturity.
−Removed: As of March 31, 2023 and December 31, 2022 , no allowances for credit losses for the Company’s investments were recorded.
−Removed: During the three months ended March 31, 2023 and 2022 , the Company did no t recognize any impairment losses related to investments.
+Added: As of June 30, 2023 and December 31, 2022 , no allowances for credit losses for the Company’s investments were recorded.
+Added: three and six months ended June 30, 2023 and 2022 , the Company did no t recognize any impairment losses related to investments.
Marketable securities
−Removed: As stated above, the Company had no marketable securities as of March 31, 2023.
−Removed: The following table summarizes the Company's marketable debt securities as of December 31, 2022.
+Added: The following table summarizes the Company's marketable securities as of June 30, 2023 and December 31, 2022.
(in thousands)
+Added: June 30, 2023
+Added: U.S Treasury bills
+Added: Total marketable securities
December 31, 2022
14 unchanged sentences
Accumulated depreciation
−Removed: Depreciation expense was $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively.
−Removed: In addition, for the three months ended March 31, 2023 and 2022 , there was less than $ 0.1 million of depreciation related to sublet assets recorded as other expense.
+Added: Depreciation expense was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023 , respectively.
+Added: Depreciation expense was $ 0.1 million for the three and six months ended June 30, 2022, respectively.
+Added: In addition, for the three and six months ended June 30, 2023 , there was less than $ 0.1 million and $ 0.1 million, respectively, of depreciation related to sublet assets recorded as other expense.
+Added: For the three and six months ended June 30, 2022 , there was less than $ 0.1 million and $ 0.1 million, respectively, of depreciation related to sublet assets recorded as other expense.
Accrued Expenses
15 unchanged sentences
As partial compensation for these services, the Company issued MTS Health Partners 35,260 shares of common stock.
−Removed: As of March 31, 2023 , the Company’s Certificate of Incorporation, as amended and restated, authorized the Company to issue up to 115,000,000 shares of $ 0.001 par value common stock, of which 43,269,200 shares were issued and outstanding, and up to 5,000,000 shares of $ 0.001 par value undesignated preferred stock, of which no shares were issued or outstanding.
+Added: As of June 30, 2023 , the Company’s Certificate of Incorporation, as amended and restated, authorized the Company to issue up to 115,000,000 shares of $ 0.001 par value common stock, of which 43,269,200 shares were issued and outstanding, and up to 5,000,000 shares of $ 0.001 par value undesignated preferred stock, of which no shares were issued or outstanding.
The voting, dividend, and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers, and preferences of the holders of the preferred stock, if any.
12 unchanged sentences
The Company has no obligation to sell any of the ATM Shares and may at any time suspend offers under the ATM Agreement.
−Removed: The ATM Shares will be offered and sold pursuant to the Company’s Registration Statement on Form S-3, filed by the Company on November 10, 2022 and effective as of November 21, 2022 (the “Registration Statement”),
−Removed: and the sales agreement prospectus that forms a part of such Registration Statement.
+Added: The ATM Shares will be offered and sold pursuant to the Company’s Registration Statement on Form S-3, filed by the Company on November 10, 2022 and effective as of November 21, 2022 (the “Registration Statement”), and the sales agreement prospectus that forms a part of such Registration Statement.
As of the date of this Quarterly Report on Form 10-Q, no ATM Shares have been sold pursuant to the ATM Agreement.
10 unchanged sentences
The maximum aggregate number of shares that may be issued under the 2020 Plan is 8,000,000 over the ten-year term of the 2020 Plan.
−Removed: During the twelve months ended December 31, 2022 , options to purchase 148,623 shares issued under the Prior Plans were cancelled and became available for grant under the 2020 Plan.
−Removed: No such options were cancelled in the three months ended March 31, 2023.
As permitted by the 2020 Plan, the Company added 1,730,768 and 708,418 shares available for grant to the 2020 Plan on January 1, 2023 and January 1, 2022, respectively.
−Removed: As of March 31, 2023 , 1,061,915 shares of common stock were available for grant under the 2020 Plan.
+Added: As of June 30, 2023 , 906,429 shares of common stock were available for grant under the 2020 Plan.
Stock Option Valuation
5 unchanged sentences
Stock Options
−Removed: The following table summarizes the Company’s stock option activity for the three months ended March 31, 2023 (amounts in millions, except for share, contractual term, and per share data):
+Added: The following table summarizes the Company’s stock option activity for the six months ended June 30, 2023 (amounts in millions, except for share, contractual term, and per share data):
Weighted Average
4 unchanged sentences
Options forfeited/expired
−Removed: Outstanding as of March 31, 2023
−Removed: Exercisable as of March 31, 2023
−Removed: Vested and expected to vest as of March 31, 2023
−Removed: (a) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the common stock for the options that were "in the money" at March 31, 2023 .
+Added: Outstanding as of June 30, 2023
+Added: Exercisable as of June 30, 2023
+Added: Vested and expected to vest as of June 30, 2023
+Added: (a) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the common stock for the options that were "in the money" at June 30, 2023 .
Option Grants
−Removed: During the three months ended March 31, 2023 , the Company granted options to purchase 1,108,000 shares of common stock to employees under the 2020 Plan.
+Added: During the six months ended June 30, 2023 , the Company granted options to purchase 1,293,200 shares of common stock to employees under the 2020 Plan.
The options have an exercise price equal to the closing stock price as of the grant date, and vest over four years , with 25 % vesting on the first anniversary of the grant and the remainder vesting in equal monthly installments thereafter.
−Removed: The weighted-average grant date fair value of options granted under the 2020 Plan during the three months ended March 31, 2023 was $ 3.33 .
+Added: The weighted-average grant date fair value of options granted under the 2020 Plan during the six months ended June 30, 2023 was $ 3.77 .
At December 31, 2022, the aggregate intrinsic value of outstanding options granted under the 2020 Plan was $ 0.3 million.
−Removed: As of March 31, 2023 , total unrecognized compensation expense related to unvested stock options granted under the 2020 Plan was $ 14.1 million, which is expected to be recognized over a weighted average period of 2.49 years.
+Added: As noted in the table above, the aggregate intrinsic value of outstanding options at June 30, 2023 was $ 0.1 million.
+Added: As of June 30, 2023 , total unrecognized compensation expense related to unvested stock options granted under the 2020 Plan was $ 12.8 million, which is expected to be recognized over a weighted average period of 2.38 years.
Inducement Stock Option Grant
−Removed: During the three months ended March 31, 2023 , the Company granted options to purchase 180,000 shares of common stock granted outside of the 2020 Plan.
+Added: During the six months ended June 30, 2023 , the Company granted options to purchase 180,000 shares of common stock granted outside of the 2020 Plan.
This grant was made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq listing rule 5635(c)(4).
The options issued under this inducement grant have an exercise price equal to the closing stock price as of the grant date, and vest over four years , with 25 % vesting on the first anniversary of the grant and the remainder vesting in equal monthly installments thereafter.
−Removed: The weighted-average grant date fair value of options granted under this inducement grant during the three months ended March 31, 2023 was $ 4.62 .
−Removed: As of March 31, 2023 , total unrecognized compensation expense related to unvested inducement options granted was $ 0.8 million, which is expected to be recognized over a weighted average period of 3.86 years.
+Added: The weighted-average grant date fair value of options granted under this inducement grant during the six months ended June 30, 2023 was $ 4.62 .
+Added: As of June 30, 2023 , total unrecognized compensation expense related to unvested inducement options granted was $ 0.8 million, which is expected to be recognized over a weighted average period of 3.61 years.
Restricted Stock Units
2 unchanged sentences
The shares underlying the RSUs are not issued until the RSUs vest.
−Removed: Activity with respect to the Company's RSUs during the three months ended March 31, 2023 was as follows (in millions, except share, contractual term, and per share data):
+Added: Activity with respect to the Company's RSUs during the six months ended June 30, 2023 was as follows (in millions, except share, contractual term, and per share data):
Weighted Average
4 unchanged sentences
Restricted stock units forfeited
−Removed: Outstanding as of March 31, 2023
−Removed: Unvested and expected to vest as of March 31, 2023
+Added: Outstanding as of June 30, 2023
+Added: Unvested and expected to vest as of June 30, 2023
Restricted Stock Unit Grants
The RSUs vest annually over four years and have a weighted-average grant date fair value of $ 4.94 per unit.
−Removed: As of March 31, 2023 , total unrecognized compensation expense for RSUs was $ 3.1 million, which is expected to be recognized over a weighted-average period of 3.84 years.
+Added: As of June 30, 2023 , total unrecognized compensation expense for RSUs was $ 2.9 million, which is expected to be recognized over a weighted-average period of 3.59 years.
Stock-Based Compensation
Stock-based compensation expense was classified in the condensed consolidated statements of operations as follows:
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
+Added: Six Months Ended June 30,
Research and development
4 unchanged sentences
Such agreements provide for a transferable, worldwide license to certain patent rights regarding technology used by the Company with respect to the development of CTI-1601.
+Added: Both agreements continue from their effectve date through the last to expire of the applicable agreement's licensed patents unless earlier terminated by either party in accordance with their terms.
In partial consideration for the right and license granted under these agreements, the Company will pay each of WFUHS and IU a royalty of a low single digit percentage of net sales of licensed products depending on whether there is a valid patent covering such products.
−Removed: As additional consideration for these agreements, the Company is obligated to pay each of WFUHS and IU certain milestone payments of up to $ 2.6 million in the aggregate upon the achievement of certain developmental milestones, commencing on the enrollment of the first patient in a Phase 1 clinical trial.
+Added: As additional consideration for these agreements, the Company is obligated to pay each of WFUHS and IU certain milestone payments of up to $ 2.6 million in the aggregate upon the achievement of certain developmental milestones, which commenced with the enrollment of the first patient in a Phase 1 clinical trial.
The Company enrolled the first patient in its SAD trial on December 11, 2019 and paid WFUHS and IU less than $ 0.1 million.
33 unchanged sentences
The Company records sublease income on this sublease on a straight-line basis as a component of other income/(expense).
−Removed: Expense arising from operating leases was $ 0.1 million during the three months ended March 31, 2023 and 2022, respectively.
−Removed: For operating leases, the weighted-average remaining lease term for leases at March 31, 2023 and December 31, 2022 was 6.5 and 6.8 years, respectively.
−Removed: For operating leases, the weighted average discount rate for leases at March 31, 2023 and December 31, 2022 was 11.0 %.
+Added: Expense arising from operating leases was $ 0.1 million and $ 0.2 million during the three and six months ended June 30, 2023 , respectively.
+Added: Expense arising from operating leases was $ 0.1 million and $ 0.2 million during the three and six months ended June 30, 2022, respectively.
+Added: For operating leases, the weighted-average remaining lease term for leases at June 30, 2023 and December 31, 2022 was 6.3 and 6.8 years, respectively.
+Added: For operating leases, the weighted average discount rate for leases at June 30, 2023 and December 31, 2022 was 11.0 %.
The Company has not entered into any financing leases.
−Removed: Maturities of lease liabilities due under these lease agreements as of March 31, 2023 are as follows:
+Added: Maturities of lease liabilities due under these lease agreements as of June 30, 2023 are as follows:
(in thousands)
−Removed: Nine months ending December 31, 2023
+Added: Six months ending December 31, 2023
Year ended December 31, 2024
8 unchanged sentences
Management’s Discussion and Analysis of Financial Condition and Results of Operations
−Removed: The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”), and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 14, 2023 ("the 2022 Annual Report").
+Added: The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report”), and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 14, 2023 (the "2022 Annual Report") and our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2023.
Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks, uncertainties, and assumptions.
5 unchanged sentences
We are a clinical-stage biotechnology company focused on developing treatments for patients suffering from complex rare diseases using our novel cell penetrating peptide ("CPP") technology platform.
−Removed: Our lead product candidate, CTI-1601, is a subcutaneously administered, recombinant fusion protein intended to deliver frataxin ("FXN"), an essential protein, to the mitochondria of patients with FA.
+Added: Our lead product candidate, CTI-1601, is a subcutaneously administered, recombinant fusion protein intended to deliver frataxin ("FXN"), an essential protein, to the mitochondria of patients with Friedreich's ataxia (“FA”).
FA is a rare, progressive, and fatal disease in which patients are unable to produce sufficient FXN due to a genetic abnormality.
1 unchanged sentence
CTI-1601 represents the first potential therapy designed to increase FXN levels in patients with FA.
−Removed: We have completed two Phase 1 clinical trials in patients with FA.
−Removed: We have also received an orphan drug designation, fast track designation and rare pediatric disease designation, from the FDA for CTI‑1601.
−Removed: In addition, we received orphan designation for CTI-1601 from the European Commission and a Priority Medicines ("PRIME") designation from the EMA.
−Removed: The receipt of such designations or positive opinions may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA or EMA procedures and does not assure ultimate approval by the U.S.
−Removed: Food and Drug Administration, ("FDA") or the European Medicines Agency, ("EMA").
We believe that our CPP platform, which enables a therapeutic molecule to cross a cell membrane in order to reach intracellular targets, has the potential to enable the treatment of other rare and orphan diseases.
2 unchanged sentences
CTI-1601 Program Update
−Removed: On May 20, 2021 we announced that we had received a PRIME designation for CTI-1601 in FA.
−Removed: Through PRIME, the EMA offers early and proactive support to medicine developers to optimize the generation of robust data on a medicine’s benefits and risks and enable accelerated assessment of medicines applications so that these medicines can reach patients earlier.
−Removed: The PRIME designation was based on both pre-clinical data as well as tolerability data from the CTI-1601 Phase 1 program in patients with FA.
+Added: We have completed two phase 1 clinical trials of CTI-1601 and the first cohort of a phase 2 trial in patients with FA:
In May 2021, we reported positive top-line data from our Phase 1 FA program after completing dosing of the single ascending dose ("SAD") trial in December 2020 and of the multiple ascending dose ("MAD") trial in March 2021.
2 unchanged sentences
There were no serious adverse events associated with either the MAD or SAD trials.
−Removed: Also in May 2021, the FDA placed a clinical hold on our CTI-1601 clinical program after we notified the agency of mortalities at the highest dose levels of a 26-week NHP toxicology study that was designed to support extended dosing of patients with CTI-1601.
+Added: In May 2023, we reported preliminary unblinded top-line data from the 25 mg cohort of our Phase 2 four-week, placebo-controlled, dose exploration trial of CTI-1601 in FA patients.
+Added: Data from the cohort indicate CTI-1601 was generally well tolerated and showed increases in FXN levels from baseline compared to placebo in all evaluated tissues (skin and buccal cells) at day 14.
+Added: From May 2021 through July 2023, we have had ongoing interactions and discussions with the FDA regarding the clinical development of CTI-1601:
+Added: In May 2021, the FDA placed a clinical hold on our CTI-1601 clinical program after we notified the agency of mortalities at the highest dose levels of a 26-week non-human ("NHP") toxicology study that was designed to support extended dosing of patients with CTI-1601.
At the time the hold was placed, we had no interventional clinical trials with patients enrolling or enrolled.
In February 2022, in response to the complete response we submitted to the FDA, the FDA stated that it was maintaining the clinical hold and that additional data were needed to resolve the clinical hold.
−Removed: We subsequently submitted a request to the FDA for a Type C meeting, which was granted and was held in July 2022.
+Added: We subsequently submitted a request to the FDA for a Type C meeting, which was granted and held in July 2022.
We submitted a complete response incorporating additional information requested by the FDA at the meeting as well as information on the proposed study in August 2022.
−Removed: In September 2022, following the Type C meeting and the submission of the Company's complete response, the FDA allowed the 25 mg cohort of a Phase 2, four-week, placebo-controlled, dose exploration trial of CTI-1601 in FA patients to proceed.
+Added: In September 2022, following the Type C meeting and the submission of the Company's complete response, the FDA allowed the 25 mg cohort of a Phase 2, four-week, placebo-controlled, dose exploration trial of CTI-1601 in FA patients discussed above to proceed.
In connection with this decision, the FDA lifted its full clinical hold on the CTI-1601 clinical development program and imposed a partial clinical hold.
−Removed: The dose exploration trial is designed to further characterize CTI-1601’s safety, PD and PK profiles to provide information about the long-term dose and dose regimen.
−Removed: In May, 2023, we reported preliminary top-line data from the 25 mg cohort of our Phase 2 four-week, placebo controlled dose exploration trial of CTI-1601 in FA patients.
−Removed: Safety data indicate that repeated subcutaneous injections of 25 mg CTI-1601 were generally well tolerated when administered daily for 14 days and then every-other-day thereafter until day 28.
−Removed: Daily subcutaneous injections of 25 mg CTI-1601 for 14 days led to increases in frataxin levels from baseline compared to placebo in all evaluated tissues (skin and buccal cells).
−Removed: During the course of our interactions with FDA, the Agency requested unblinded data from the trial which we submitted to the Agency.
−Removed: We have submitted the unblinded data to FDA and we have a meeting scheduled with the Agency for later this quarter to discuss the information needed to gain clearance to initiate a 50 mg cohort in the Phase 2 trial.
−Removed: We expect to provide an update on the next steps for the CTI-1601 program in the third quarter of 2023, after we have received feedback from the upcoming FDA meeting.
+Added: In June 2023 we met with the Agency.
+Added: Following that meeting, we submitted a complete response to the FDA’s partial clinical hold that included unblinded safety, pharmacokinetic (“PK”) and frataxin data from the Phase 2 trial’s completed 25 mg cohort.
+Added: Following the FDA’s review of our complete response, in July 2023, the FDA cleared initiation of a second cohort of our four-week, placebo-controlled, Phase 2 dose exploration trial of CTI-1601 in patients with FA to proceed to a 50 mg cohort in which participants will be dosed daily for the first 14 days, and then every other day until day 28.
+Added: This second cohort is designed to further characterize CTI-1601’s safety, PK and pharmacodynamic profiles.
+Added: We expect to report data from the Phase 2 trial’s 50 mg cohort in the first half of 2024.
+Added: In addition, the FDA cleared for initiation our open label extension (“OLE”) trial in which participants will receive 25 mg of CTI-1601 daily.
+Added: Participants who complete treatment in the first or second cohort of our Phase 2 dose exploration trial, or who previously participated in and completed a prior phase 1 clinical trial of CTI-1601, are eligible to screen for this OLE trial.
+Added: The OLE trial is expected to begin in the first quarter of 2024 with interim data expected in the last quarter of 2024.
+Added: Further dose escalation in the Phase 2 and OLE trials and the initiation of additional U.S.
+Added: clinical trials evaluating CTI-1601 are contingent on FDA review of results from the Phase 2 trial’s 50 mg cohort in accordance with a partial clinical hold.
+Added: CTI-1601 has been granted Orphan Drug (U.S.
+Added: and Europe), Rare Pediatric Disease (U.S.), Fast Track (U.S.), and PRIME (Europe) designations for FA.
+Added: We have also begun to engage with regulators and investigators outside the U.S.
+Added: as we prepare to expand our clinical program to additional geographies.
+Added: With approximately 75% of individuals with FA living outside the U.S., establishing global clinical trial capabilities is important for addressing the pressing unmet needs of the FA community.
Financing Activities
4 unchanged sentences
offering program providing for the sale of up to an aggregate of $50.0 million of shares of our common stock from time to time through this investment bank as sales agent.
+Added: To date, we have made no sales under this ATM agreement.
Financial Operations Overview
4 unchanged sentences
Research and Development Expenses
−Removed: Research and development expenses, which consist primarily of costs associated with our product research and development efforts, are expensed as incurred.
+Added: Research and development expenses consist primarily of costs associated with our product research and development efforts and are expensed as incurred.
Research and development expenses consist primarily of:
third-party contract costs relating to research, formulation, manufacturing, non-clinical studies, and clinical trial activities;
−Removed: employee related costs, including salaries, benefits and stock-based compensation expenses for employees engaged in scientific research and development functions;
+Added: employee related costs, including cash compensation, benefits and stock-based compensation expenses for employees engaged in scientific research and development functions;
external costs of outside consultants and vendors;
payments made under our third-party licensing agreements;
−Removed: sponsored research agreements;
laboratory consumables;
9 unchanged sentences
the influence of the FDA or other regulatory authorities on our clinical trial design and timing;
−Removed: establishing manufacturing capabilities or making arrangements with third-party manufacturers and risks involved with development of manufacturing processes, FDA pre-approval inspection practices and successful completion of manufacturing batches for clinical development and other regulatory purposes;
+Added: our ability to expand or establish new manufacturing capabilities or making arrangements with third-party manufacturers and risks involved with development of manufacturing processes, FDA pre-approval inspection practices and successful completion of manufacturing batches for clinical development and other regulatory purposes;
liquidity constraints, failure and instability of the U.S.
4 unchanged sentences
A change in the outcome of any of these variables with respect to the development of a product candidate could significantly change the costs, timing and viability associated with the development of that product candidate.
−Removed: For example, if the FDA or another regulatory authority were to require us to conduct additional non-clinical or clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.
+Added: For example, if the FDA or another regulatory authority were to require us to conduct additional non-clinical or clinical trials beyond those that we currently anticipate will be required for clinical development of a product candidate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on clinical development.
General and Administrative Expenses
−Removed: General and administrative expenses (consisting primarily of personnel costs, composed of salaries, related benefits and stock-based compensation), costs related to our executive, finance, information technology, and costs
−Removed: related to other administrative functions.
+Added: General and administrative expenses consist primarily of personnel costs, composed of cash compensation, related benefits and stock-based compensation, costs related to our executive, finance, information technology, and costs related to other administrative functions.
General and administrative expenses also include insurance expenses and professional fees for auditing, tax, and legal services, including legal expenses to pursue patent protection for our intellectual property.
We expect that our general and administrative expenses will increase in the foreseeable future as we hire additional employees to implement, improve and scale our operational, financial, commercial and management systems.
−Removed: Results of Operations
−Removed: Comparison of three months ended March 31, 2023 and 2022
−Removed: The following table summarizes our results of operations for the three months ended March 31, 2023 and 2022:
−Removed: Three Months Ended March 31,
−Removed: (in thousands)
−Removed: Statement of Operations Data:
−Removed: Operating expenses:
−Removed: Research and development
−Removed: General and administrative
−Removed: Total operating expenses
−Removed: Loss from operations
−Removed: Other income (expense), net
−Removed: Research and development expenses
−Removed: Research and development expenses for the three months ended March 31, 2023 decreased $1.2 million compared to the three months ended March 31, 2022.
−Removed: The decrease in research and development expenses was primarily driven by a decrease of $0.7 million in nonclinical development costs (primarily related to lower process development costs), a decrease of $0.4 million in drug manufacturing costs, and a decrease of $0.1 million in clinical trial expense.
−Removed: General and administrative expenses
−Removed: General and administrative expenses for the three months ended March 31, 2023 were comparable to general and administrative expenses for the three months ending March 31, 2022.
−Removed: Decreases in recruiting and professional service fees were offset by increases in stock-based compensation expense and other personnel-related expenses.
−Removed: Other income (expense), net
−Removed: Other income (expense), net was $1.1 million (income) in the first quarter of 2023 compared to ($0.1) million expense in the first quarter of 2022.
−Removed: The first quarter of 2023 primarily relates to interest income which increased as compared to the first quarter of 2022 due to a higher investment base and higher interest rates on that base.
−Removed: Liquidity and Capital Resources
−Removed: Since our inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations.
−Removed: We have devoted substantially all of our resources to developing CTI-1601, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, capital raising, and providing general and administrative support for such operations.
−Removed: The following table summarizes our sources and uses of cash for each of the periods presented below:
−Removed: Three Months Ended March 31,
−Removed: (in thousands)
−Removed: Net cash used in operating activities
−Removed: Net cash provided by investing activities
−Removed: Net cash provided by financing activities
−Removed: Net increase in cash, cash equivalents and restricted cash
−Removed: Net cash used in operating activities
−Removed: During the three months ended March 31, 2023, operating activities used $7.6 million of cash, resulting from our net loss of $6.5 million, adjusted for noncash expenses of $1.3 million and changes in our operating assets and liabilities resulting in a source of cash of $2.3 million.
−Removed: Our net loss was primarily attributed to research and development activities related to our CTI-1601 program and our general and administrative expenses as described above.
−Removed: Noncash expenses are primarily stock-based compensation expenses.
−Removed: The change in operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses.
−Removed: During the three months ended March 31, 2022, operating activities used $7.5 million of cash, resulting from our net loss of $8.9 million, adjusted for noncash expenses of $1.7 million.
−Removed: Our net loss was primarily attributed to research and development activities related to our CTI-1601 program and our general and administrative expenses as described above.
−Removed: Noncash expenses primarily include stock-based compensation expenses.
−Removed: The change in operating assets and liabilities was primarily due to a decrease in accrued expenses and offset by an increase in accounts payable and prepaid expenses.
−Removed: Net cash provided by investing activities
−Removed: During the three months ended March 31, 2023, investing activities provided $92.3 million of cash from maturities of marketable debt securities.
−Removed: During the three months ended March 31, 2022, there were no investing activities.
−Removed: Net cash provided by financing activities
−Removed: During the three months ended March 31, 2023 and 2022 there were no financing activities.
Critical Accounting Policies and Significant Judgments and Estimates
6 unchanged sentences
Costs for certain research and development activities, such as manufacturing, non-clinical studies and clinical trials are generally recognized based on the evaluation of the progress of completion of specific tasks using information and data provided by our vendors and collaborators, and accordingly, are considered an area of significant judgement and management's review of manufacturing, nonclinical and clinical expenses.
−Removed: This process involves reviewing open contracts and purchase orders, communicating with our personnel and outside vendors to
−Removed: identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs.
+Added: This process involves reviewing open contracts and purchase orders, communicating with our personnel and outside vendors to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs.
We work with vendors and suppliers to ensure that our estimates of our research and development expenses are reasonable.
−Removed: Research and development activities are central to our business.
We expect to increase our investment in research and development in order to advance CTI-1601 through additional clinical trials.
1 unchanged sentence
Stock Compensation Expense
−Removed: We measure all stock-based awards granted to employees, non-employee consultants and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model.
+Added: We measure all stock-based awards granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model.
The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards.
The assumptions used in our option-pricing model represent management’s best estimates.
−Removed: These estimates are complex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment, so that they are inherently subjective.
+Added: These estimates are complex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment, and thus are inherently subjective.
If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.
1 unchanged sentence
Prior to January 1, 2023, the Company estimated its expected common stock price volatility solely based on the historical volatility of publicly traded peer companies with comparable characteristics including enterprise value, risk profiles and position within the industry.
−Removed: Beginning on January 1, 2023, the Company began blending it historical data beginning in June 2020 (following its merger with Zafgen in 2020) with its historical peer group.
−Removed: We regularly evaluate our peer group to assess changes in circumstances where identified companies may no longer be similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.
+Added: Beginning on January 1, 2023, the Company began blending it historical data starting in June 2020 (following its merger with Zafgen in 2020) with its historical peer group.
+Added: We regularly evaluate our peer group to assess changes in circumstances where identified companies may no longer be similar to us, in which case, more suitable companies whose share prices are
+Added: publicly available would be utilized in the calculation.
We expect to continue to do so until we have full historical data regarding the volatility of our own traded stock price.
8 unchanged sentences
We classify stock-based compensation expense in our condensed consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
+Added: Results of Operations
+Added: Comparison of three months ended June 30, 2023 and 2022
+Added: The following table summarizes our results of operations for the three months ended June 30, 2023 and 2022:
+Added: Three Months Ended June 30,
+Added: (in thousands)
+Added: Statement of Operations Data:
+Added: Operating expenses:
+Added: Research and development
+Added: General and administrative
+Added: Total operating expenses
+Added: Loss from operations
+Added: Other income (expense), net
+Added: Research and development expenses
+Added: Research and development expenses for the three months ended June 30, 2023 increased $0.2 million compared to the three months ended June 30, 2022.
+Added: The increase in research and development expenses was primarily driven by an increase of $0.5 million in test method development and optimization, an increase of $0.4 million in personnel related costs, an increase of $0.2 million in stock-based compensation expense associated with stock option grants made in 2022 and 2023, partially offset by a decrease of $1.1 million in clinical supply manufacturing costs.
+Added: General and administrative expenses
+Added: General and administrative expenses for the three months ended June 30, 2023 increased $0.7 million compared to the three months ended June 30, 2022.
+Added: The increase in general and administrative expense was primarily driven by an increase of $0.3 million of professional fees primarily related to increased legal expense, an increase of $0.2 million in stock-based compensation expense associated with stock option grants made in 2022 and 2023 and an increase of $0.2 million in personnel related costs related to increases in headcount.
+Added: Other income (expense), net
+Added: Other income (expense), net was $1.3 million of income in the three months ended June 30, 2023 compared to less than $0.1 million in the three months ended June 30, 2022.
+Added: The increase primarily relates to interest income on a higher investment base and higher interest rates on that base during the period.
+Added: Results of Operations
+Added: Comparison of six months ended June 30, 2023 and 2022
+Added: The following table summarizes our results of operations for the six months ended June 30, 2023 and 2022:
+Added: Six Months Ended June 30,
+Added: (in thousands)
+Added: Statement of Operations Data:
+Added: Operating expenses:
+Added: Research and development
+Added: General and administrative
+Added: Total operating expenses
+Added: Loss from operations
+Added: Other income (expense), net
+Added: Research and development expenses
+Added: Research and development expenses for the six months ended June 30, 2023 decreased $1.0 million compared to the six months ended June 30, 2022.
+Added: The decrease in research and development expenses was primarily driven by a decrease of $1.5 million in clinical supply manufacturing costs, a decrease in assay development costs of $0.2 million partially offset by an increase of $0.5 million in personnel related costs, an increase of $0.3 million in stock-based compensation expense associated with stock option grants made in 2022 and 2023.
+Added: General and administrative expenses
+Added: General and administrative expenses for the six months ended June 30, 2023 increased $0.7 million compared to the six months ended June 30, 2022.
+Added: The increase in general and administrative expense was primarily driven by an increase of $0.3 million in stock-based compensation expense associated with stock option grants made in 2022 and 2023, an increase of $0.3 million of professional fees primarily related to increased legal expense, and an increase of $0.2 million in personnel related costs related to increases in headcount.
+Added: Other income (expense), net
+Added: Other income (expense), net was $2.4 million of income in the six months ended June 30, 2023 compared to less than $0.1 million of net expense in the six months ended June 30, 2022.
+Added: The increase primarily relates to interest income on a higher investment base and higher interest rates on that base during the period.
+Added: Liquidity and Capital Resources
+Added: Since our inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations.
+Added: We have devoted substantially all of our resources to developing CTI-1601, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, capital raising, and providing general and administrative support for such operations.
+Added: The following table summarizes our sources and uses of cash for each of the periods presented below:
+Added: Six Months Ended June 30,
+Added: (in thousands)
+Added: Net cash used in operating activities
+Added: Net cash provided by (used in) investing activities
+Added: Net cash provided by financing activities
+Added: Net increase (decrease) in cash, cash equivalents and restricted cash
+Added: Net cash used in operating activities
+Added: During the six months ended June 30, 2023, operating activities used $14.9 million of cash, resulting from our net loss of $14.9 million, adjusted for noncash expenses of $3.3 million and changes in our operating assets and liabilities utilizing cash of $3.4 million.
+Added: Our net loss was primarily attributed to research and development activities related to our CTI-1601 program and our general and administrative expenses as described above.
+Added: Noncash expenses primarily relate to stock-based compensation expenses.
+Added: The change in operating assets and liabilities was primarily due to a decrease in accrued expenses and offset by an increase in accounts payable.
+Added: During the six months ended June 30, 2022, operating activities used $15.0 million of cash, resulting from our net loss of $17.6 million, adjusted for noncash expenses of $3.5 million.
+Added: Our net loss was primarily attributed to research and development activities related to our CTI-1601 program and our general and administrative expenses as described above.
+Added: Noncash expenses are primarily stock-based compensation expense.
+Added: The change in operating assets and liabilities was primarily due to decreases in prepaid expenses and accounts payable.
+Added: Net cash provided by (used in) investing activities
+Added: During the six months ended June 30, 2023, investing activities provided $82.4 million of cash, including $92.3 million from maturities of marketable securities and partially offset by $9.8 million in purchases of marketable securities.
+Added: During the six months ended June 30, 2022, investing activities used $35.3 million of cash, including $35.2 million in purchases of new marketable securities and $0.1 million in purchases of property and equipment.
+Added: Net cash provided by financing activities
+Added: During the six months ended June 30, 2023 and 2022 there were no financing activities.
Operating Capital Requirements
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We have to date incurred net losses.
−Removed: We incurred net losses of approximately $6.5 million and $8.9 million for the three months ended March 31, 2023 and 2022, respectively.
−Removed: As of March 31, 2023, we had an accumulated deficit of $158.1 million and cash and cash equivalents of $111.5 million, excluding restricted cash of $1.3 million.
+Added: We incurred net losses of approximately $14.9 million and $17.6 million for the six months ended June 30, 2023 and 2022, respectively.
+Added: As of June 30, 2023, we had an accumulated deficit of $166.5 million and cash, cash equivalents and marketable securities of $104.2 million, excluding restricted cash of $1.3 million.
Losses have resulted principally from costs incurred in connection with research and development activities, and general and administrative costs associated with the development of CTI-1601 and our operations.
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seek to identify and advance development of additional product candidates into clinical development and identify additional indications for our product candidates;
−Removed: seek to obtain regulatory approvals for our product candidates;
+Added: seek to obtain regulatory approvals for CTI-1601 and other potential product candidates;
identify, acquire or in-license other product candidates and technologies;
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expand our operational, financial, commercial and management systems and personnel, including personnel to support our clinical development and future commercialization efforts and our operations as a public company.
−Removed: We believe that based on our current operating plan our cash and cash equivalents will be able to fund operating expenses and capital expenditure requirements for at least the next twelve months from the filing of these financial statements with the SEC.
+Added: We believe that based on our current operating plan our cash, cash equivalents and marketable securities will be able to fund operating expenses and capital expenditure requirements for at least the next twelve months from the filing of these financial statements with the SEC.
If we encounter unexpected delays in our clinical trials or if there are other unanticipated changes to our operating plan from our current assumptions that negatively impact our operations, we may reduce expenditures in order to further extend our existing cash resources.
−Removed: Until we can generate substantial revenue, if ever, we expect to seek additional funding through a combination of public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.
+Added: Until we can generate substantial revenue, if ever, we expect to seek additional funding through a combination of public or private equity
+Added: offerings, debt financings, collaborations, strategic alliances and licensing arrangements or other sources.
The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, minimum cash balances, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
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If such additional financing is not available on satisfactory terms, or is not available in sufficient amounts, or we do not have sufficient authorized shares, we may be required to delay, limit, or eliminate the development of business opportunities and our ability to achieve our business objectives, our competitiveness, and our business, financial condition, and results of operations will be materially adversely affected.
−Removed: We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
−Removed: In addition, geopolitical tensions, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, bank instability and the ability of the U.S.
+Added: We could also be required to seek funds through arrangements with collaborative partners, strategic alliances or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.
+Added: In addition, geopolitical tensions, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, bank instability and the ability of the U.S.
government to manage federal debt limits, as well as the potential impact of health crises on the global financial markets may reduce our ability to access capital, which could negatively affect our liquidity and ability to continue as a going concern.
−Removed: If we are unable to obtain sufficient funding when needed and/or on acceptable terms, we may be required to significantly curtail, delay or discontinue one or more of our research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion or pre commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.
+Added: If we are unable to obtain sufficient funding when needed and/or on acceptable terms, we may be required to significantly curtail, delay or discontinue one or more of our research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion and/or pre commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.
Certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.
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Recently Issued Accounting Pronouncements
−Removed: Please read Note 2 to our condensed consolidated financial statements included in Part I of Item 1 of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business, if any.
+Added: Please read Note 2 to our condensed consolidated financial statements included in Part I of Item 1 of this Quarterly Report for a description of recent accounting pronouncements applicable to our business, if any.
Other Company Information
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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.