What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-08-08 · 117 added, 85 removed, 407 unchanged (33% of the section changed)

Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 and 2023

Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended June 30, 2024 and 2023

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023

Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023

Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023

Notes to Condensed Consolidated Financial Statements

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(In thousands, except share and per share data)

September 30,

Current assets:

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5,000,000 shares authorized

as of June 30, 2024 and December 31, 2023;

as of September 30, 2024 and December 31, 2023;

no shares issued and

outstanding as of June 30, 2024 and December 31, 2023

outstanding as of September 30, 2024 and December 31, 2023

Common stock, $ 0.001 par value per share;

115,000,000 shares

authorized as of June 30, 2024 and December 31, 2023;

authorized as of September 30, 2024 and December 31, 2023;

63,806,628 and 43,909,069 shares issued and outstanding as of

June 30, 2024 and December 31, 2023, respectively

September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive gain (loss)

Accumulated other comprehensive gain

Total stockholders’ equity

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(In thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Operating expenses:

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Balances as of June 30, 2024

Stock-based compensation expense

Exercise of stock options

Unrealized gain on marketable debt securities

Balances as of September 30, 2024

LARIMAR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

(In thousands, except share data)

Comprehensive

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Balances as of June 30, 2023

Stock-based compensation expense

Exercise of stock options

Exercise of warrants

Unrealized loss on marketable securities

Balances as of September 30, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

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(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

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Supplemental disclosure of non-cash investing and financing activities:

Purchases of property and equipment included in accounts payable and accrued expenses

Offering costs included in accrued expense

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The Company has completed two phase 1 studies of nomlabofusp, a Phase 2 dose exploration study, and initiated an open label extension study (“OLE”) in patients with FA in January, 2024.

This OLE study is ongoing and continues to enroll patients.

In May 2021, after reporting positive top-line data from the Company’s Phase 1 FA program, the U.S.

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In May 2024 the FDA removed the partial clinical hold on the development of nomlabofusp.

In March 2024, the Company dosed the first patient in the OLE trial, discussed above, evaluating daily subcutaneous injections of 25 mg of nomlabofusp self-administered or administered by a caregiver,This study is ongoing with all seven sites activated and additional patients continue to be enrolled and dosed.

Patients who completed treatment in the Company's Phase 2 dose exploration study or who previously completed a prior clinical trial of nomlabofusp are eligible to screen and possibly participate in the OLE study.

Current patients in the OLE study either participated in the Phase 2 dose exploration study and/or a previous clinical trial.

In March 2024, the Company dosed the first patient in its OLE trial discussed above, evaluating daily subcutaneous injections of 25 mg of nomlabofusp self-administered or administered by a caregiver.

This study is ongoing with seven sites activated and additional patients are continuing to be enrolled and dosed.

Participants who completed treatment in the Phase 2 dose exploration study, or who previously completed a prior clinical trial of nomlabofusp, are potentially eligible to screen for the OLE study.

The OLE study will evaluate the safety and tolerability, pharmacokinetics, and frataxin levels in peripheral tissues as well as other exploratory pharmacodynamic markers (lipid profiles and gene expression data) following long-term subcutaneous administration of nomlabofusp.

In addition, clinical assessments collected during the study will be compared to data from a matched control arm derived from participants in the Friedreich’s Ataxia Clinical Outcome Measures Study (FACOMS) database.

Dose escalation to the 50 mg dose in the OLE study is currently planned following further characterization of the frataxin pharmacodynamics (PD) at the 25 mg dose.

Interim data is expected in the fourth quarter of 2024.

The Company has had separate discussions with the FDA regarding the use of tissue FXN levels as a novel surrogate endpoint.

In addition, following the completion of enrollment, as well as at least one participant completing one year of dosing, clinical assessments collected during the study will be compared to data from a matched control arm derived from participants in the Friedreich’s Ataxia Clinical Outcome Measures Study ("FACOMS") database.

Dose escalation to the 50 mg dose in the OLE study is currently planned following further characterization of the frataxin PD at the 25 mg dose.

The Company currently expects to provide a nomlabofusp development program update in mid-December 2024 that will include available safety, pharmacokinetic and frataxin data as well as available clinical outcome observations from patients currently receiving the daily 25 mg dose of nomlabofusp for approximately 30 to 180 days in the ongoing OLE study.

An update on enrollment and plans on the OLE study will also be provided.

Separately, the Company has had discussions with the FDA regarding the use of tissue FXN levels as a novel surrogate endpoint.

The FDA acknowledged that frataxin deficiency appears to be critical to the pathogenic mechanism of FA, and that there continues to be an unmet need for treatments for FA patients that address the underlying disease pathophysiology.

The Company intends to pursue an accelerated approval using FXN levels, supportive PD and clinical information, and safety data from the OLE study, along with additional non-clinical pharmacology information needed to support the novel surrogate endpoint approach.

The Company plans to expand the nomlabofusp clinical program into adolescent (12-17 years old) and pediatric (2-11 years old) patients with FA.

The Company expects to initiate a pharmacokinetics (PK) run-in study in adolescents by the end of this year and expects to transition these study participants into the ongoing OLE study upon completion of the PK study.

The run-in-study will enroll 12-15 adolescent patients who will be randomized 2:1 to receive either nomlabofusp or placebo daily.

The Company is also planning the initiation of a global confirmatory study by mid-2025 with potential sites in the U.S., Europe, the U.K., Canada and Australia.

The Biologics License Application (BLA) filing is targeted in the second half of 2025 to support accelerated approval.

The Company is on track to expand the nomlabofusp clinical program into adolescent (12-17 years old) and pediatric (2-11 years old) patients with FA.

The Company expects to initiate a PK run-in study in adolescents by the end of this year and expects to transition these study participants into the ongoing OLE study after assessment of safety and exposure data in the adolescent cohort.

The run-in-study will enroll 12-15 adolescent patients and 12-15 pediatric patients who will be randomized 2:1 to receive either nomlabofusp or placebo daily.

The Company is also planning the initiation of a global confirmatory/registration study by mid-2025 with potential sites in the U.S., Europe, the U.K., Canada and Australia.

The Biologics License Application ("BLA") filing is targeted in the second half of 2025 to support potential accelerated approval.

On May 30, 2024, the Company announced that the FDA's Center for Drug Evaluation and Research ("CDER") had selected nomlabofusp as one of a few programs for participation in the Support for Clinical Trials Advancing Rare Disease Therapeutics ("START") Pilot Program.

The objective of the program is to accelerate the development of drugs for rare diseases that lead to significant disability or death by facilitating frequent advise and regular communication with the FDA staff to expedite the review process of biologics and drugs.

The objective of the program is to accelerate the development of drugs for rare diseases that lead to significant disability or death by facilitating frequent advice and regular communication with the FDA staff to expedite the review process of biologics and drugs.

In September 2024, the Company received the Medicines and Healthcare Regulatory Agency ("MHRA") Innovative Licensing and Access Pathway ("ILAP") aimed at potentially accelerating access and reducing the time to market in the United Kingdom.

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.

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The condensed consolidated balance sheet as of December 31, 2023 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP.

The accompanying unaudited condensed consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements.

The accompanying unaudited condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023, 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.

However, the Company believes that the disclosures are adequate to make the information presented not misleading.

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, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024 and the Company's Quarterly Report on Form 10-Q filed with the SEC on May 9, 2024.

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, 2024, condensed consolidated results of operations for the three and six months ended June 30, 2024 and condensed consolidated statement of cash flows for the six months ended June 30, 2024 have been made.

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2024 .

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 September 30, 2024, condensed consolidated results of operations for the three and nine months ended September 30, 2024 and condensed consolidated statement of cash flows for the nine months ended September 30, 2024 have been made.

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2024 .

Liquidity and Capital Resources

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Since its inception, the Company has incurred significant recurring operating losses and negative cash flows from operations.

The Company has incurred net losses of $ 36.3 million and $ 14.9 million for the six months ended June 30, 2024 and 2023, respectively.

In addition, as of June 30, 2024, the Company had an accumulated deficit of $ 224.8 million .

The Company has incurred net losses of $ 51.8 million and $ 24.0 million for the nine months ended September 30, 2024 and 2023, respectively.

In addition, as of September 30, 2024, the Company had an accumulated deficit of $ 240.3 million .

The Company expects to continue to generate operating losses for the foreseeable future.

As of June 30, 2024, the Company had approximately $ 226.1 million of cash, cash equivalents and marketable securities available for use to fund its operations and capital requirements.

As of September 30, 2024, the Company had approximately $ 203.7 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 and marketable securities upon the merger with Zafgen, Inc.

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The Company has not yet commercialized any products and does not expect to generate revenue from the commercial sale of any products for several years, if at all.

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.

The Company expects that its research and development and general and administrative expenses will continue to increase, that sales and marketing expenses will become significant and, as a result, that it will need additional capital to fund its future operating and capital requirements.

Unless and until the Company can generate substantial revenue, management continuously evaluates different strategies to obtain the required funding for future operations.

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In addition, geopolitical tensions, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, banking instability, monetary policy changes 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.

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.

If the Company is unable to obtain sufficient funding when needed and/or on acceptable terms, the Company may be required to significantly curtail, delay or discontinue one or more of its research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion, pre commercialization efforts and/or commercial operations, which could adversely affect its business prospects, or the Company may be unable to continue operations.

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Costs associated with internal research and development and external research and development services, including drug development, clinical studies and non-clinical studies, are expensed as incurred.

Research and development expenses include costs for salaries, employee benefits, subcontractors, facility-related expenses, depreciation, stock-based compensation, third-party license fees, laboratory supplies, and external costs of outside vendors engaged to conduct discovery, non-clinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials, and other costs.

Research and development expenses include costs for salaries, employee benefits, subcontractors, facility-related expenses, depreciation, non-cash stock-based compensation, third-party license fees, laboratory supplies, and external costs of outside vendors engaged to conduct discovery, non-clinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials, and other costs.

The Company recognizes external research and development costs based on an evaluation of the progress to completion of specific tasks using information provided to the Company by its key service providers.

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The Company accounts for forfeitures as they occur.

The Company classifies stock-based compensation expense in its 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.

The Company classifies stock-based compensation expense in its 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.

Prior to May 28, 2020, the Company had been a private company and lacked company-specific historical and implied volatility information for its common stock.

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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” method for awards that qualify as “plain-vanilla” options.

The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

The risk-free interest rate is determined by reference to the U.S.

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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.

The Company excluded 6,900,232 and 5,129,327 common stock equivalents outstanding as of June 30, 2024 and 2023, respectively, from the computation of diluted net loss per share for the three and six months ended June 30, 2024 and 2023 because they had an anti-dilutive impact due to the net loss incurred for the periods presented.

The Company excluded 6,990,827 and 5,100,997 common stock equivalents outstanding as of September 30, 2024 and 2023, respectively, from the computation of diluted net loss per share for the three and nine months ended September 30, 2024 and 2023 because they had an anti-dilutive impact due to the net loss incurred for the periods presented.

Recently Issued and Adopted Accounting Pronouncements

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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.

In November 2023, the FASB issued new guidance designed to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses per segment.

The new standard must be adopted on a retrospective basis.

We intend to adopt the new guidance for the fiscal year ending December 31, 2024, and subsequent interim periods.

Given that the accounting standard update affects disclosures exclusively, we do not anticipate that its adoption will have a material impact on our consolidated financial statements.

In December 2023, the FASB issued new guidance designed to improve income tax disclosure requirements primarily through increased disaggregation disclosures within the effective tax rate reconciliation as well as enhanced disclosures on income taxes paid.

The guidance is effective for all fiscal years beginning after December 15, 2024.

The new standard can be adopted on a prospective basis with an option for it to be adopted retrospectively and early adoption is permitted.

We are currently evaluating this guidance to determine its impact on our consolidated financial statements.

Fair Value Measurements and Marketable Securities

Fair Value Measurements

The Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 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 Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 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.

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The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts payable and accrued liabilities.

For accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of June 30, 2024 and December 31, 2023 were considered representative of their fair values due to their short term to maturity.

The following tables summarize the Company’s cash equivalents and marketable securities as of June 30, 2024 and December 31, 2023:

For accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of September 30, 2024 and December 31, 2023 were considered representative of their fair values due to their short term to maturity.

The following tables summarize the Company’s cash equivalents and marketable securities as of September 30, 2024 and December 31, 2023:

(in thousands)

June 30, 2024

September 30, 2024

Cash equivalents:

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Total cash equivalents and marketable securities

The accrued interest receivable related to the Company’s investments was $ 0.8 million and $ 0.3 million as of June 30, 2024 and December 31, 2023, respectively, and is included in prepaid expenses and other current assets on the condensed consolidated balance sheet.

The accrued interest receivable related to the Company’s investments was $ 0.9 million and $ 0.3 million as of September 30, 2024 and December 31, 2023, respectively, and is included in prepaid expenses and other current assets on the condensed consolidated balance sheet.

The Company classifies its money market funds and U.S.

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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.

As of June 30, 2024 and December 31, 2023, 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.

As of June 30, 2024 and December 31, 2023 , no allowances for credit losses for the Company’s investments were recorded.

During the three and six months ended June 30, 2024 and 2023 , the Company did no t recognize any impairment losses related to investments.

As of September 30, 2024 and December 31, 2023, no allowances for credit losses for the Company’s investments were recorded.

During the three and nine months ended September 30, 2024 and 2023 , the Company did no t recognize any impairment losses related to investments.

Marketable securities

The following table summarizes the Company's marketable securities as of June 30, 2024 and December 31, 2023.

The following table summarizes the Company's marketable securities as of September 30, 2024 and December 31, 2023.

(in thousands)

June 30, 2024

September 30, 2024

Treasury Bills

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Total marketable securities

No marketable securities held as of June 30, 2024 or December 31, 2023, had remaining maturities greater than two years.

As of June 30, 2024 and December 31, 2023 , the Company held no investments that have been in a continuous loss position for 12 months or longer.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

September 30,

(in thousands)

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Fixed assets, net consisted of the following:

September 30,

(in thousands)

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Accumulated depreciation

Depreciation expense was $ 0.1 million for the three and six months ended June 30, 2024 and 2023, respectively.

In addition, for the three and six months ended June 30, 2024 and 2023 , there was less than $ 0.1 million of depreciation related to sublet assets recorded as other expense.

Depreciation expense was $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2024 , respectively.

Depreciation expense was $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2023, respectively.

In addition, for the three and nine months ended September 30, 2024 , there was less than $ 0.1 million of depreciation in each period related to sublet assets recorded as other expense.

For the three and nine months ended September 30, 2023 , there was less than $ 0.1 million and $ 0.1 million, respectively, of depreciation related to sublet assets recorded as other expense.

Accrued Expenses

Accrued expenses consisted of the following:

September 30,

(in thousands)

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As partial compensation for these services, the Company issued MTS Health Partners 35,260 shares of common stock.

As of June 30, 2024 ,the Company’s Ninth Amended and Restated Certificate of Incorporation, as amended, authorized the Company to issue up to 115,000,000 shares of common stock, par value $ 0.001 per share, of which 63,802,517 shares were issued and outstanding, and up to 5,000,000 shares of undesignated preferred stock, par value $ 0.001 per share, of which no shares were issued or outstanding.

As of September 30, 2024 , the Company’s Ninth Amended and Restated Certificate of Incorporation, as amended, authorized the Company to issue up to 115,000,000 shares of common stock, par value $ 0.001 per share, of which 63,806,628 shares were issued and outstanding, and up to 5,000,000 shares of undesignated preferred stock, par value $ 0.001 per share, 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.

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No ATM Shares were ever sold pursuant to the 2022 ATM Agreement.

In May 2024, the Company entered into a sales agreement (the "ATM Agreement") with Guggenheim Securities, LLC in connection with the establishment of an “at-the-market” offering program under which the Company could sell up to an aggregate of $ 100.0 million of shares of common stock (the “ATM Shares”) from time to time.To date, no sales of common stock have been made under this ATM Agreement.

In May 2024, the Company entered into a sales agreement (the "ATM Agreement") with Guggenheim Securities, LLC in connection with the establishment of an “at-the-market” offering program under which the Company could sell up to an aggregate of $ 100 million of shares of common stock (the “ATM Shares”) from time to time.

To date, no sales of common stock have been made under this ATM Agreement.

2020 Equity Incentive Plan

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Options outstanding under the Prior Plans will remain outstanding, unchanged, and subject to the terms of the Prior Plans and the respective award agreements, and no further awards will be made under the Prior Plans.

However, if any award previously

granted under the Prior Plans, expires, terminates, is canceled, or is forfeited for any reason after the approval of the 2020 Plan, the shares subject to that award will be added to the 2020 Plan share pool so that they can be utilized for new grants under the 2020 Plan.

However, if any award previously granted under the Prior Plans, expires, terminates, is canceled, or is forfeited for any reason after the approval of the 2020 Plan, the shares subject to that award will be added to the 2020 Plan share pool so that they can be utilized for new grants under the 2020 Plan.

The 2020 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, and cash or other stock-based awards.

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As permitted by the 2020 Plan, the Company added 1,756,363 and 1,730,768 shares available for grant to the 2020 Plan on January 1, 2024 and January 1, 2023, respectively.

As of June 30, 2024 , 874,632 shares of common stock were available for grant under the 2020 Plan.

As of September 30, 2024 , 779,926 shares of common stock were available for grant under the 2020 Plan.

During the twelve months ended December 31, 2023 , options to purchase 224,437 shares issued under the Prior Plans were cancelled and became available for grant under the 2020 Plan.

No such options were cancelled in the six months ended June 30, 2024.

During the nine months ended September 30, 2024 , options to purchase 1,242 shares issued under the Prior Plans were cancelled and became available for grant under the 2020 Plan.

At September 30, 2024 , 344,683 options under the Prior Plans remained outstanding at prices ranging from $ 11.88 to $ 445.80 , and, if unexercised, will return to the 2020 Plan no later than July 15, 2030.

Stock Option Valuation

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees:

September 30,

Risk-free interest rate

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Stock Options

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2024 (amounts in millions, except for share, contractual term, and per share data):

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2024 (amounts in millions, except for share, contractual term, and per share data):

Weighted Average

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Options forfeited/expired

Outstanding as of June 30, 2024

Exercisable as of June 30, 2024

Vested and expected to vest as of June 30, 2024

(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, 2024 .

Outstanding as of September 30, 2024

Exercisable as of September 30, 2024

Vested and expected to vest as of September 30, 2024

Option Grants

During the six months ended June 30, 2024 , the Company granted options to purchase 1,962,477 shares of common stock to employees and directors under the 2020 Plan.

During the nine months ended September 30, 2024 , the Company granted options to purchase 2,082,377 shares of common stock to employees and directors under the 2020 Plan.

The options have an exercise price equal to the closing stock price as of the grant date.

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The remaining 95,000 options were annual grants to the Company's directors and vest one year from the grant date.

The weighted-average grant date fair value of options granted under the 2020 Plan during the six months ended June 30, 2024 was $ 4.01 .

As of June 30, 2024 , 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 2.62 years.

The weighted-average grant date fair value of options granted under the 2020 Plan during the nine months ended September 30, 2024 was $ 4.15 .

As of September 30, 2024 , total unrecognized compensation expense related to unvested stock options granted under the 2020 Plan was $ 11.8 million, which is expected to be recognized over a weighted average period of 2.56 years.

Inducement Stock Option Grant

There were no inducement awards granted in the six months ended June 30, 2024.

As of June 30, 2024 , total unrecognized compensation expense related to unvested inducement options granted was $ 0.9 million, which is expected to be recognized over a weighted average period of 2.78 years.

There were no inducement awards granted in the nine months ended September 30, 2024.

As of September 30, 2024 , 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 2.53 years.

Restricted Stock Units

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The shares underlying the RSUs are not issued until the RSUs vest.

Activity with respect to the Company's RSUs during the six months ended June 30, 2024 was as follows (in millions, except share, contractual term, and per share data):

Activity with respect to the Company's RSUs during the nine months ended September 30, 2024 was as follows (in millions, except share, contractual term, and per share data):

Weighted Average

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Restricted stock units forfeited

Outstanding as of June 30, 2024

Unvested and expected to vest as of June 30, 2024

Outstanding as of September 30, 2024

Unvested and expected to vest as of September 30, 2024

Restricted Stock Unit Grants

During the six months ended June 30, 2024 , the Company granted 245,372 shares of RSUs to employees under the 2020 Plan.

During the nine months ended September 30, 2024 , the Company granted 245,372 shares of RSUs to employees under the 2020 Plan.

The RSUs vest annually over four years and have a weighted-average grant date fair value of $ 4.21 per unit.

As of June 30, 2024 , total unrecognized compensation expense for RSUs was $ 2.9 million, which is expected to be recognized over a weighted-average period of 2.9 years.

As of September 30, 2024 , total unrecognized compensation expense for RSUs was $ 2.6 million, which is expected to be recognized over a weighted-average period of 2.65 years.

Stock-Based Compensation

Stock-based compensation expense was classified in the condensed consolidated statements of operations as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

23 unchanged sentences

The new lease on 3,462 additional square footage commenced on October 1, 2023 and the Company recorded a right of use asset and lease liability of $ 0.3 million as of that date.

The right of use assets and lease liabilities with both these leases are reflected in the financial statements for six months ended June 30, 2024 as are the right of use asset and lease liability of the Company's Boston office space discussed below.

The right of use assets and lease liabilities with both these leases are reflected in the financial statements as of September 30, 2024 as are the right of use asset and lease liability of the Company's Boston office space discussed below.

Boston Office Lease

1 unchanged sentence

The lease expires on October 30, 2029 .

As part of the agreement, the Company is required to maintain a letter of credit, which upon signing was $ 1.3 million and is classified as restricted cash within the condensed consolidated financial statements.

As part of the agreement, the Company is required to maintain a letter of credit, which upon signing was $ 1.3 million and was later reduced to $ 0.6 million in October 2024, and is classified as restricted cash within the condensed consolidated financial statements.

In addition to the base rent, the Company is also responsible for its share of operating expenses, electricity and real estate taxes, which costs are not included in the determination of the leases’ right-of-use assets or lease liabilities.

13 unchanged sentences

On August 9, 2021, the Company executed the remaining option to extend the lease for an additional year, expiring on December 31, 2022 .

In September 2023, the Company executed extended this lease for an additional year with the option to terminate with four months notice, On March 28, 2024, the Company gave the requisite notice and vacated the property in May 2024.

In September 2023, the Company extended this lease for an additional year with the option to terminate with four months' notice.

On March 28, 2024, the Company gave the requisite notice and vacated the property in May 2024.

On October 16, 2023, the Company entered into an operating lease for lab space in King of Prussia, Pennsylvania for a period of four years .

3 unchanged sentences

Lease Expense

Expense arising from operating leases was $ 0.1 million and $ 0.3 million during the three and six months ended June 30, 2024 , respectively.

Expense arising from operating leases was $ 0.1 million and $ 0.2 million during the three and six months ended June 30, 2023, respectively.

For operating leases, the weighted-average remaining lease term for leases at June 30, 2024 and December 31, 2023 was 4.9 and 5.5 years, respectively.

For operating leases, the weighted average discount rate for leases at June 30, 2024 and December 31, 2023 was 11.0 %.

Expense arising from operating leases was $ 0.1 million and $ 0.4 million during the three and nine months ended September 30, 2024 , respectively.

Expense arising from operating leases was $ 0.1 million and $ 0.2 million during the three and nine months ended September 30, 2023, respectively.

For operating leases, the weighted-average remaining lease term for leases at September 30, 2024 and December 31, 2023 was 4.7 and 5.5 years, respectively.

For operating leases, the weighted average discount rate for leases at September 30, 2024 and December 31, 2023 was 11.0 %.

The Company has not entered into any financing leases.

Maturities of lease liabilities due under these lease agreements as of June 30, 2024 are as follows:

Maturities of lease liabilities due under these lease agreements as of September 30, 2024 are as follows:

(in thousands)

Six months ending December 31, 2024

Three months ending December 31, 2024

Year ended December 31, 2025

12 unchanged sentences

The Company will have access to all study data for use in its regulatory filings, as appropriate.

The Com pany incurred $ 0.8 M of c osts related to the Track-FA program in the second quarter of 2024 and will fund future costs going forward.

During the three and nine months ended September 30, 2024, the Com pany incurred less than $ 0.1 million and $ 0.8 million of c osts related to the Track-FA program and will fund future costs going forward.

One of the Company’s Directors is also a director of FARA.

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 1. Financial Statements