What changed in this filing

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Item 1. Financial Statements

2023-11-06 compared with 2023-08-08 · 166 added, 97 removed, 364 unchanged (42% of the section changed)

3 unchanged sentences

in thousands, except share and per share amounts)

September 30,

Current assets:

12 unchanged sentences

Loan payable, net of discount

Lease liability

Total long term liabilities

2 unchanged sentences

Preferred stock, par value $ 0.0001 per share authorized:

5,000,000 shares at June 30, 2023 and December 31,

2,369,797 and 2,369,797 shares issued and outstanding at June 30, 2023 and December 31, 2022,

5,000,000 shares at September 30, 2023 and December 31, 2022;

2,369,797 and 2,369,797 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Common stock, par value $ 0.0001 per share authorized:

200,000,000 at June 30, 2023 and December 31, 2022;

18,459,033 and 18,102,523 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

200,000,000 at September 30, 2023 and December 31, 2022;

18,494,192 and 18,102,523 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Additional paid-in-capital

7 unchanged sentences

in thousands, except share and per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Total revenues

13 unchanged sentences

in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Other comprehensive income (loss):

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Balance at June 30, 2023

Issuance of common shares in equity offering, excluding to related parties, net of transaction costs

Sale of common shares to related parties and exercise of common stock options, net of transaction costs

Compensation expense related to stock options for services

Unrealized loss on marketable securities

Hercules warrant

Balance at September 30, 2023

Balance at December 31, 2021

6 unchanged sentences

Balance at June 30, 2022

Compensation expense related to stock options for services

Unrealized loss on marketable securities

Balance at September 30, 2022

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

in thousands)

Six Months Ended June 30,

Nine Months Ended

September 30,

Cash flows from operating activities:

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Accordingly, the unaudited condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete annual financial statements.

However, we believe that the disclosures included in these financial statements are adequate to make the information presented not misleading.

However, the Company believes that the disclosures included in these financial statements are adequate to make the information presented not misleading.

The unaudited condensed consolidated financial statements, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of such interim results.

The interim results are not necessarily indicative of the results that we will have for the full year ending December 31, 2023 or any subsequent period.

The interim results are not necessarily indicative of the results that the Company will have for the full year ending December 31, 2023 or any subsequent period.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes to those statements for the year ended December 31, 2022.

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To determine whether an impairment exists, the Company considers whether it intends to sell the debt security and, if the Company does not intend to sell the debt security, it considers available evidence to assess whether it is more likely than not that it will be required to sell the security before the recovery of its amortized cost basis.

During the six months ended June 30, 2023 and 2022, the Company determined it did not have any securities that were other-than-temporarily impaired.

During the nine months ended September 30, 2023 and 2022, the Company determined it did no

t have any securities that were other-than-temporarily impaired.

Marketable securities are stated at fair value, including accrued interest, with their unrealized gains and losses included as a component of accumulated other comprehensive income or loss, which is a separate component of stockholders’ equity.

1 unchanged sentence

Realized gains and losses are determined on the specific identification method.

During the six months ended June 30, 2023 and 2022, the Company did not have any realized gains or losses on marketable securitie

During the nine months ended September 30, 2023 and 2022, the Company did not have any realized gains or losses on marketable securities.

Fair Value of Financial Instruments

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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 and other observable inputs.

As of June 30, 2023, the Company’s financial assets valued based on Level 1 inputs consisted of cash and cash equivalents in a money market fund, its financial assets valued based on Level 2 inputs consisted of high-grade corporate and government agency bonds and commercial paper, and it had no financial assets valued based on Level 3 inputs.

During the six months ended June 30, 2023 and 2022, the Company did not have any transfers of financial assets between Levels 1 and 2.

As of June 30, 2023 and December 31, 2022, the Company did not have any financial liabilities that were recorded at fair value on a recurring basis on the balance sheet.

As of September 30, 2023, the Company’s financial assets valued based on Level 1 inputs consisted of cash and cash equivalents in a money market fund, its financial assets valued based on Level 2 inputs consisted of high-grade corporate and government agency bonds and commercial paper, and it had no financial assets valued based on Level 3 inputs.

During the nine months ended September 30, 2023 and 2022, the Company did not have any transfers of financial assets between Levels 1 and 2.

As of September 30, 2023 and December 31, 2022, the Company did not have any financial liabilities that were recorded at fair value on a recurring basis on the balance sheet.

Research and Development Costs

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Research and development costs are comprised of costs incurred in performing research and development activities, including internal costs (including stock-based compensation), costs for consultants, milestone payments under licensing agreements, and other costs associated with the Company’s preclinical and clinical programs.

In particular, the Company has conducted safety studies in animals, optimized and implemented the manufacturing of our drug, and conducted clinical trials, all of which are considered research and development expenditures.

In particular, the Company has conducted safety studies in animals, optimized and implemented the manufacturing of its drug, and conducted clinical trials, all of which are considered research and development expenditures.

Management uses significant judgment in estimating the amount of research and development costs recognized in each reporting period.

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Stock-Based Compensation

The Company recognizes stock-based compensation expense based on the grant date fair value of stock options and restricted stock units granted to employees, officers, and directors.

The Company recognizes stock-based compensation expense based on the grant date fair value of stock options, restricted stock units, and other stock-based compensation awards granted to employees, officers, directors, and consultants.

Awards that vest as the recipient provides service are expensed on a straight-line basis over the requisite service period.

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at least annually and the forfeiture rate is adjusted as necessary.

For other stock-based compensation awards granted to employees and directors that vest based on market conditions, such as the trading price of the Company’s common stock achieving or exceeding certain price targets, the Company uses a Monte Carlo simulation model to estimate the grant date fair value and recognize stock compensation expense over the derived service period.

The Monte Carlo simulation model requires key inputs for risk-free interest rate, dividend yield, volatility, and expected life.

The assumptions used in computing the fair value of equity awards reflect the Company’s best estimates but involve uncertainties related to market and other conditions.

Changes in any of these assumptions may materially affect the fair value of awards granted and the amount of stock-based compensation recognized.

The Company uses the asset and liability method to account for income taxes.

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Diluted net loss per common share is computed using the weighted average number of common shares outstanding and the weighted average dilutive potential common shares outstanding using the treasury stock method.

However, for the six months ended June 30, 2023 and 2022, diluted net loss per share is the same as basic net loss per share because the inclusion of weighted average shares of common stock issuable upon the exercise of stock options and warrants or vesting of restricted stock units, and common stock issuable upon the conversion of preferred stock would be anti-dilutive.

However, for the nine months ended September 30, 2023 and 2022, diluted net loss per share is the same as basic net loss per share because the inclusion of weighted average shares of common stock issuable upon the exercise of stock options and warrants or vesting of restricted stock units, and common stock issuable upon the conversion of preferred stock would be anti-dilutive.

The following table summarizes outstanding securities not included in the computation of diluted net loss per common share, as their inclusion would be anti-dilutive:

Six Months Ended June 30,

Outstanding at September 30,

Common stock options

Restricted stock units

Other stock-based awards

Preferred stock

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Food and Drug Administration (FDA) and other government regulations.

The Company has incurred losses since inception, including approximately $ 162.7 million for the six months ended June 30, 2023, resulting in an accumulated deficit of approximately $ 1,125 million as of June 30, 2023.

The Company has incurred losses since inception, including approximately $ 261.4 million for the nine months ended September 30, 2023, resulting in an accumulated deficit of approximately $ 1,224.1 million as of September 30, 2023.

Management expects to incur losses for the foreseeable future.

To date, the Company has funded its operations primarily through proceeds from sales of the Company’s capital stock and debt financings.

The Company believes that its cash, cash equivalents and marketable securities at June 30, 2023 will be sufficient to fund operations past one year from the issuance of these financial statements.

To meet its future capital needs, the Company intends to raise additional capital through debt or equity financings, collaborations, partnerships or other strategic transactions.

In October 2023, the Company completed a public offering and received approximately $ 472.0 million net cash proceeds.

Please see “Note 10 – Subsequent Events” to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q

for more information.

The Company believes that its cash, cash equivalents and marketable securities will be sufficient to fund operations past one year from the issuance of these financial statements.

To meet its future capital needs, the Company may need to raise additional capital through debt or equity financings, collaborations, partnerships or other strategic transactions.

However, there can be no assurance that the Company will be able to complete any such transactions on acceptable terms or otherwise.

The inability of the Company to obtain sufficient funds on acceptable terms when needed could have a material adverse effect on the Company’s business, results of operations and financial condition.

The inability of the Company to obtain sufficient funds on acceptable terms when needed, if at all, could have a material adverse effect on the Company’s business, results of operations and financial condition.

The Company has the ability to delay certain research activities and related clinical expenses if necessary due to liquidity concerns until a date when those concerns are relieved.

1 unchanged sentence

A summary of cash, cash equivalents and available-for-sale

marketable securities held by the Company as of June 30, 2023 and December 31, 2022 is as follows (in thousands):

June 30, 2023

marketable securities held by the Company as of September 30, 2023 and December 31, 2022 is as follows (in thousands):

September 30, 2023

Cash and cash equivalents:

1 unchanged sentence

Money market funds (Level 1)

Corporate debt securities due within 3 months of date of purchase (Level 2)

Total cash and cash equivalents

Marketable securities:

Corporate debt securities due within 1

year of date of purchase (Level 2)

Corporate debt securities due within 1 year of date of purchase (Level 2)

government and government sponsored entities due within 1 year of date of purchase (Level 2)

government and government sponsored entities due within 1 to 2 years of date of purchase (Level 2)

Total cash, cash equivalents and marketable securities

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Accrued Liabilities

Accrued liabilities as of June 30, 2023 and December 31, 2022 consisted of the following (in thousands):

Accrued liabilities as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):

September 30,

Contract research organization costs

19 unchanged sentences

An additional $ 15.0 million was drawn under Tranche 2 in June of 2023.

The Company has the ability to draw the remaining $ 15.0 million available under Tranche 2 by September 30, 2023

in accordance with the Amended Loan Facility.

The remaining $ 15.0 million available under Tranche 2 was drawn in September of 2023 in accordance with the Amended Loan Facility.

The third tranche (“Tranche 3”) of $ 75.0 million remains unchanged by the Amendment, and such borrowings are available subject to the Company obtaining a certain FDA approval for resmetirom.

Coincident with the expansion of Tranche 2 borrowing capacity by $ 15.0 million, the Amendment reduced the fourth tranche under the Loan Facility (“Tranche 4”) by $ 15.0 million to $ 60.0 million, which amount is available subject to Hercules’ sole discretion.

In connection with the $ 35.0 million drawn under Tranche 2

at the closing of the Amendment and $ 15.0 million drawn in June of 2023, the Company issued to Hercules and affiliates Tranche 2 Warrants to purchase 3,504 shares of common stock, which had a Black-Scholes value of $ 0.7 million.

In connection with the $ 35.0 million drawn under Tranche 2 at the closing of the Amendment,

$ 15.0 million drawn in June of 2023, and $ 15.0 million drawn in September of 2023, the Company issued to Hercules and affiliates Tranche 2 Warrants to purchase an aggregate of 4,555 shares of common stock, which had a Black-Scholes value of $ 0.9 million.

The Amendment reduced the interest rate under the Amended Loan Facility to the greater of (i) the prime rate as reported in The Wall Street Journal plus 2.45 % and (ii) 8.25 %.

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The Loan Facility also includes customary covenants associated with a secured loan facility, including covenants concerning financial reporting obligations, and certain limitations on indebtedness, liens (including a negative pledge on intellectual property and other assets), investments, distributions (including dividends), collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, and deposit accounts.

As of June 30, 2023, the outstanding principal under the Loan Facility was $ 100.0 million.

The interest rate as of June 30, 2023 was 10.70 %.

As of June 30, 2023, the Company was in compliance with all loan covenants and provisions.

Future minimum payments, including interest and principal, under the loans payable outstanding as of June 30, 2023 are as follows (in thousands):

Period Ending June 30, 2023:

2023 (remaining six months)

As of September 30, 2023, the outstanding principal under the Loan Facility was $ 115.0 million.

The interest rate as of September 30, 2023 was 10.95 %.

As of September 30, 2023, the Company was in compliance with all loan covenants and provisions.

Future minimum payments, including interest and principal, under the loans payable outstanding as of September 30, 2023 are as follows (in thousands):

Period Ending September 30, 2023:

2023 (remaining three months)

Less amount representing interest

4 unchanged sentences

The common stock will vote together with all other classes and series of stock of the Company as a single class on all actions to be taken by the Company’s stockholders.

Each share of common stock is entitled to receive dividends, as and when declared by the Company’s board of directors.

Each share of common stock is entitled to receive dividends, as and when declared by the Company’s Board of Directors (the “Board”).

The Company has never declared cash dividends on its common stock and does not expect to do so in the foreseeable future.

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sales agreement (the “2021 Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the Company could, from time to time, issue and sell shares of its common stock.

The 2021 Sales Agreement initially

authorized an aggregate offering of up to $ 200 million in shares of our common stock, at the Company’s option, through Cowen as its sales agent.

The 2021 Sales Agreement initially authorized an aggregate offering of up to $ 200.0 million in shares of the Company’s common stock, at the Company’s option, through Cowen as its sales agent.

Sales of common stock through Cowen could be made by any method that is deemed an “at-the-market”

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Subject to the terms and conditions of the 2021 Sales Agreement, Cowen would use commercially reasonable efforts consistent with its normal trading and sales practices to sell the common stock based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company imposed).

In December 2022, the Company sold 738,900 shares of common stock

under the 2021 Sales Agreement for an aggregate of $ 159.1 million in gross proceeds, with net proceeds to the Company of $ 155.9 million after deducting commissions and other transaction costs.

In December 2022, the Company sold 738,900 shares of common stock under the 2021 Sales Agreement for an aggregate of $ 159.1 million in gross proceeds, with net proceeds to the Company of $ 155.9 million after deducting commissions and other transaction costs.

In total, under the 2021 Sales Agreement the Company sold 1,235,943 shares for an aggregate of $ 199.9 million in gross proceeds, with net proceeds to the Company of approximately $ 195.8 million after deducting commissions and other transaction costs through December 31, 2022.

Of those shares sold, 738,900 were sold in 2022, and 497,043 were sold in 2021.

All shares were sold pursuant to the Company’s effective shelf registration statement on Form S-3 (the “Registration Statement”) and

the prospectus supplement relating thereto.

As of June 30, 2023, no amounts remained reserved and available for sale under the 2021 Sales Agreement and the related prospectus supplement.

In May 2023, the Company amended the 2021 Agreement (the “Sales Agreement Amendment

”), with Cowen, pursuant to which the Company may, from time to time, issue and sell in additional $ 200 million in

shares of its common stock.

All shares were sold pursuant to the Company’s effective shelf registration statement on Form S-3

(the “Registration Statement”) and the prospectus supplement relating thereto.

As of September 30, 2023, no amounts remained reserved and available for sale under the 2021 Sales Agreement and the related prospectus supplement.

In May 2023, the Company amended the 2021 Agreement (the “Sales Agreement Amendment”), with Cowen, pursuant to which the Company may, from time to time, issue and sell in additional $ 200.0 million in shares of its common stock.

The Company is not obligated to make any sales of its common stock under this arrangement.

Any shares sold will be sold pursuant to the Company’s effective Registration Statement

(the “Registration Statement”) and prospectus supplement filed pursuant to the Registration Statement.

The Sales Agreement Amendment authorizes sales of

shares of our common stock, from time to time, at the Company’s option, through Cowen as its sales agent.

Any shares sold will be sold pursuant to the Registration Statement and prospectus supplement filed pursuant to the Registration Statement.

The Sales Agreement Amendment authorizes sales of shares of the Company’s common stock, from time to time, at the Company’s option, through Cowen as its sales agent.

Sales of common stock through Cowen may be made by any method that is deemed an “at-the-market”

offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, and as described in the prospectus supplement.

In total, under the Sales Agreement Amendment,

the Company sold 85,901 shares for an aggregate of $ 22.4 million in gross proceeds, with net proceeds to the Company of approximately $ 21.8 million after deducting commissions and other transaction costs.

All shares were sold pursuant to the Company’s effective Registration Statement

and the prospectus supplement relating thereto.

As of June 30, 2023, $ 177.6 million remained reserved and available for sale under the 2023 Sales Agreement

and the Company’s related prospectus supplement.

During the three months ended September 30, 2023, under the Sales Agreement Amendment, the Company sold 12,200 shares for an aggregate of $ 2.8 million in gross proceeds, with net proceeds to the Company of approximately $ 2.7 million after deducting commissions and other transaction costs.

During the nine months ended September 30, 2023, and in total under the Sales Agreement Amendment, the Company sold 98,101 shares for an aggregate of $ 25.2 million in gross proceeds, with net proceeds to the Company of approximately $ 24.5 million after deducting commissions and other transaction costs.

All shares were sold pursuant to the Company’s effective Registration Statement and the prospectus supplement relating thereto.

As of September 30, 2023, $ 174.8 million remained reserved and available for sale under the 2023 Sales Agreement Amendment and the Company’s related prospectus supplement.

Stock-based Compensation

The Company’s 2015 Stock Plan, as amended, is our primary equity incentive compensation plan through which equity based grants are awarded.

2015 Stock Plan

The Company’s 2015 Stock Plan, as amended (the “2015 Stock Plan”), is one of the Company’s equity incentive compensation plans through which equity based grants are awarded.

The 2015 Stock Plan provides for the grant of incentive stock options, non-statutory

stock options, restricted stock, restricted stock units and other stock-based compensation awards to employees, officers, directors, and consultants of the Company.

The administration of the 2015 Stock Plan is under the general supervision of the Compensation Committee of the Board of Directors.

The administration of the 2015 Stock Plan is under the general supervision of the Compensation Committee of the Board.

The terms of stock options awarded under the 2015 Stock Plan, in general, are determined by the Compensation Committee, provided the exercise price per share generally shall not be set at less than the fair market value of a share of the common stock on the date of grant and the term shall not be greater than ten years from the date the option is granted.

As of June 30, 2023, the Company had restricted stock units and options outstanding to purchase an aggregate of

2,805,840 shares of its common stock, which includes options outstanding under its prior incentive compensation plan, the 2006 Stock Plan.

As of June 30, 2023, 670,634 shares were available for future issuance under the 2015 Stock Plan.

As of September 30, 2023, 686,125 shares were available for future issuance under the 2015 Stock Plan.

2023 Inducement Plan

In September 2023, the Company adopted the 2023 Inducement Plan (the “Inducement Plan”), pursuant to which the Company may from time to time make equity grants to new employees as a material inducement to their employment.

The Inducement Plan was adopted without stockholder approval, pursuant to Nasdaq Listing Rule 5635(c)(4), and is administered by the Compensation Committee of the Board.

The Inducement Plan provides for the granting of non-statutory

stock options, restricted stock, restricted stock units, performance stock units and other stock-based compensation awards to new employees, but does not allow for the granting of incentive stock options.

The terms of the stock options under the Inducement Plan, in general, are determined by the Compensation Committee, provided the exercise price per share generally shall not be set at less than the fair market value of a share of the common stock on the date of grant and the term shall not be greater than ten years from the date the option or award is granted.

A total of 500,000 shares of the Company’s common stock were reserved for issuance under the Inducement Plan.

As of September 30, 2023, 287,011 shares were available for future issuance under the 2023 Inducement Plan.

Stock Options

The following table summarizes stock option activity during the six months ended June 30, 2023:

The following table summarizes stock option activity during the nine months ended September 30, 2023:

average exercise

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Options cancelled

Outstanding at June 30, 2023

Exercisable at June 30, 2023

The total cash received by the Company as a result of stock option exercises was $ 21.8 million and $ 0 million, respectively, for the six months ended June 30, 2023 and 2022.

The total intrinsic value of options exercised was $ 48.9 million and $ 0 million, respectively, for the six months ended June 30, 2023 and 2022.

The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the six months ended June 30, 2023 and 2022 were $ 219.02 and $ 55.84 , respectively.

Outstanding at September 30, 2023

Exercisable at September 30, 2023

The total cash received by the Company as a result of stock option exercises was $ 26.2 million and $ 0.0 million, respectively, for the nine months ended September 30, 2023 and 2022.

The total intrinsic value of options exercised was $ 51.0 million and $ 0.0 million, respectively, for the nine months ended September 30, 2023 and 2022.

The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the nine months ended September 30, 2023 and 2022 were $ 219.02 and $ 55.14 , respectively.

Restricted Stock Units

The Company’s share-based compensation plan provides for awards of restricted stock units to employees, officers, directors and consultants to the Company.

Restricted stock units vest over the service period, and are subject to forfeiture if employment or service terminates before vesting.

As of June 30, 2023, the Company had 222,300 restricted stock units outstanding, with a weighted average grant date fair value of $ 294.19 per unit.

The Company’s 2015 Stock Plan provides for awards of restricted stock units to employees, officers, directors and consultants to the Company.

The Company’s Inducement Plan provides for awards of restricted stock units to new employees.

Restricted stock units vest over a period of months or years, or upon the occurrence of certain performance criteria or the attainment of stated goals or events, and are subject to forfeiture if employment or service terminates before vesting.

As of September 30, 2023, the Company had 311,767 restricted stock units outstanding, with a weighted average grant date fair value of $ 256.81 per unit.

Other Stock-Based Awards

The Company’s 2015 Stock Plan provides for other stock-based compensation awards to employees, officers, directors and consultants to the Company.

The Company’s Inducement Plan provides for other stock-based compensation awards to new employees.

As of September 30, 2023, the Company had 150,000 performance stock units outstanding under the Inducement Plan, with a weighted average grant date fair value of $ 146.37 per unit.

Outstanding Awards

As of September 30, 2023, the Company had restricted stock units, performance stock units, and options outstanding pursuant to which an aggregate of 2,980,379 shares of its common stock may be issued pursuant to the terms of all awards granted under the 2015 Stock Plan and Inducement Plan.

Stock-Based Compensation Expense

Stock-based compensation expense during the six months ended June 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Stock-based compensation expense during the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Stock-based compensation expense by type of award:

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Restricted stock units

Other stock-based awards

Total stock-based compensation expense

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Total stock-based compensation expense included in net loss

Unrecognized stock-based compensation expense as of June 30, 2023 was $ 98.2 million with a weighted average remaining period of 2.90 years.

Unrecognized stock-based compensation expense as of September 30, 2023 was $ 119.3 million with a weighted average remaining period of 2.68 years.

Commitments and Contingencies

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Furthermore, a tiered single-digit royalty is payable on net sales of resmetirom or a product developed from resmetirom, subject to certain reductions.

The Company has not achieved any additional product development or regulatory milestones and had no Licensed Product sales for the six months ended June 30, 2023 and 2022.

The Company has entered into customary contractual arrangements and letters of intent in preparation for and in support of the clinical trials.

The Company has not achieved any additional product development or regulatory milestones and had no Licensed Product sales for the nine months ended September 30, 2023 and 2022.

The Company has entered into customary contractual arrangements and letters of intent in preparation for and in support of clinical trials and commercialization.

In August 2023, The Company entered into the Fifth Amendment to the Office Lease (the “Lease Amendment”).

The Lease Amendment extends the term of the lease through November 2026 .

As a result of the Lease Amendment, an incremental $ 1.6 million ROU asset and lease liabilities were recorded during the nine months ended September 30, 2023.

Subsequent Events

On September 28, 2023, the Company entered into an Underwriting Agreement with Goldman Sachs & Co.

LLC, as representative of the several underwriters named therein, pursuant to which the Company sold to the underwriters in an underwritten public offering (the “Offering”):

(i) 1,248,098 shares of common stock at a public offering price of $ 151.69 per share, and (ii) pre-funded warrants

(the “Pre-Funded Warrants”)

to purchase 2,048,098 shares of common stock at a public offering price of $ 151.6899 per Pre-Funded Warrant,

which represents the per share public offering price for the common stock less a $ 0.0001 per share exercise price for each such Pre-Funded Warrant.

Offering closed on October 3, 2023.

The gross proceeds of the Offering was $ 500.0 million, and the Company received net proceeds, after deducting the underwriting discount and commissions and other estimated offering expenses payable by the Company, of approximately $ 472.0 million.

The Company intends to use the net proceeds from the Offering for its clinical and commercial activities in preparation for a potential launch of resmetirom in the U.S.

and for general corporate purposes, including, without limitation, research and development expenditures, clinical trial expenditures, manufacture and supply of drug substance and drug products, potential acquisitions or licensing of new technologies, capital expenditures and working capital.

The Pre-Funded Warrants are

exercisable at any time after the date of issuance.

A holder of Pre-Funded Warrants may

not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99 % of the number of shares of common stock outstanding immediately after giving effect to such exercise.

A holder of Pre-Funded Warrants may

increase or decrease this percentage, but not in excess of 19.99 %, by providing at least 61 days prior notice to the Company.

********** END OF FINANCIAL STATEMENTS **********

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are based on our beliefs and assumptions and on information currently available to us, but are subject to factors beyond our control Forward-looking statements:

This Quarterly Report on Form 10-Q

includes “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that are based on our beliefs and assumptions and on information currently available to us, but are subject to factors beyond our control Forward-looking statements:

reflect management’s current knowledge, assumptions, judgment and expectations regarding future performance or events;

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Our clinical trials, including the anticipated timing of disclosure, presentations of data from, or outcomes from our trials,

Research and development activities, and the timing and results associated with the future development of our lead product candidate, resmetirom (formerly known as MGL-3196), including projected market size, sector leadership, and patient treatment estimates for non-alcoholic steatohepatitis (“NASH”) and nonalcoholic fatty liver disease (“NAFLD”) patients,

The timing and completion of projected future clinical milestone events, including enrollment, additional studies, top-line data and open label projections,

Resmetirom’s potential to be a cost-effective specialty therapy for NASH patients with significant liver fibrosis,

Research and development activities, and the timing and results associated with the future development of our lead product candidate, resmetirom (formerly known as MGL-3196),

including projected market size, sector leadership, and patient treatment estimates for non-alcoholic

steatohepatitis (“NASH”) and nonalcoholic fatty liver disease (“NAFLD”) patients,

The timing and completion of projected future clinical milestone events, including enrollment, additional studies, top-line

data and open label projections,

Resmetirom’s potential to be a cost-effective specialty therapy for NASH patients with significant liver fibrosis (F2/F3),

Plans, objectives and timing for making a Subpart H (Accelerated Approval of New Drugs for Serious or Life-Threatening Illnesses) submission to the FDA,

Projections or objectives for obtaining accelerated or full approval for resmetirom for NASH patients with significant fibrosis (or non-cirrhotic NASH patients) and NASH patients with compensated cirrhosis,

Projections or objectives for obtaining accelerated or full approval for resmetirom for NASH patients with liver fibrosis and NASH patients with compensated cirrhosis,

Our primary and key secondary study endpoints for resmetirom, and the potential for achieving such endpoints and projections, including NASH resolution, safety, fibrosis treatment, cardiovascular effects and lipid treatment with resmetirom,

Optimal dosing levels for resmetirom and projections regarding potential NASH or NAFLD and potential patient benefits with resmetirom, including future NASH resolution, safety, fibrosis treatment, cardiovascular effects, lipid treatment and/or biomarker effects with resmetirom,

Our ability to address the unmet needs of patients suffering from NASH with significant fibrosis,

The potential efficacy and safety of resmetirom for non-cirrhotic NASH patients and cirrhotic NASH patients,

The potential for resmetirom to become the best-in-class and/or first-to-market treatment option for patients with NASH and liver fibrosis;

Anticipated or estimated future results of operations and expenses as we expand our resmetirom clinical development program and our commercial development program;

Our ability to address the unmet needs of patients suffering from NASH with significant liver fibrosis,

The potential efficacy and safety of resmetirom for non-cirrhotic

NASH patients and cirrhotic NASH patients,

The potential for resmetirom to become the best-in-class

and/or first-to-market

treatment option for patients with NASH with significant liver fibrosis;

Anticipated or estimated future results of operations and expenses, and our long-term liquidity expectations as we expand our resmetirom clinical development program and our commercial development program;

launch/partnering plans,

The ability to develop clinical evidence demonstrating the utility of non-invasive tools and techniques to screen and diagnose NASH and/or NAFLD patients,

The predictive power of liver fat reduction with resmetirom, as measured by non-invasive tests, on NASH resolution and/or fibrosis reduction or improvement, and potential NASH or NAFLD patient risk profile benefits with resmetirom,

The ability to develop clinical evidence demonstrating the utility of non-invasive

tools and techniques to screen and diagnose NASH and/or NAFLD patients,

The predictive power of liver fat reduction with resmetirom, as measured by non-invasive

tests, on NASH resolution and/or fibrosis reduction or improvement, and potential NASH or NAFLD patient risk profile benefits with resmetirom,

The predictive power of liver fat, liver volume changes or MAST scores for NASH and/or NAFLD patients,

The predictive power of NASH resolution and/or liver fibrosis reduction with resmetirom or improvement using non-invasive tests, including the use of ELF, FibroScan, MRE and/or MRI-PDFF,

The predictive power of non-invasive tests generally, including for purposes of diagnosing NASH, monitoring patient response to resmetirom, or recruiting and conducting a NASH clinical trial,

The predictive power of NASH resolution and/or liver fibrosis reduction with resmetirom or improvement using non-invasive

tests, including the use of ELF, FibroScan, MRE and/or MRI-PDFF,

The predictive power of non-invasive

tests generally, including for purposes of diagnosing NASH, monitoring patient response to resmetirom, or recruiting and conducting a NASH clinical trial,

Market demand for and acceptance of our products,

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Risks associated with meeting the objectives of our clinical studies, including, but not limited to our ability to achieve enrollment objectives concerning patient numbers (including an adequate safety database), outcomes objectives and/or timing objectives for our studies, any delays or failures in enrollment, the occurrence of adverse safety events, and the risks of successfully conducting trials that are substantially larger, and have patients with different disease states, than our past trials,

The potential impact of cyber attacks and other security incidents on our operations or business;

Our continued reliance on third-party contract manufacturers for the manufacture of our product candidates, including resmetirom,

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our clinical and commercial development of resmetirom;

enrollment and trial outlook uncertainties, generally, based on blinded, locked or limited trial data and in relation to COVID-19-related measures and individual precautionary measures that may be implemented or continued for an uncertain period of time;

enrollment and trial outlook uncertainties, generally, based on blinded, locked or limited trial data and in relation to COVID-19-related

measures and individual precautionary measures that may be implemented or continued for an uncertain period of time;

our potential inability to raise sufficient capital to fund our ongoing operations as currently planned or to obtain financings on terms similar to those we have arranged in the past;

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the risks of achieving potential benefits in studies that includes substantially more patients, and patients with different disease states, than our prior studies;

limitations associated with early stage or non-placebo controlled study data;

our ability to prevent and/or mitigate cyber attacks, unauthorized exfiltration of data or other security incidents;

limitations associated with early stage or non-placebo

controlled study data;

the timing and outcomes of clinical studies of resmetirom;

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Securities and Exchange Commission for more detailed information regarding these risks and uncertainties and other factors that may cause actual results to differ materially from those expressed or implied.

We specifically discuss these risks and uncertainties in greater detail in the section appearing in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 23, 2023 (the “2022 Form 10-K”), as well as in our other filings with the SEC.

You should read the 2022 Form 10-K, this Quarterly Report, and the other documents that we file or have filed with the SEC, with the understanding that our actual future results may be materially different from the results expressed or implied by these forward-looking statements.

We specifically discuss these risks and uncertainties in greater detail in the section appearing in Part I, Item 1A of our Annual Report on Form 10-K

for the year ended December 31, 2022, filed with the SEC on February 23, 2023 (the “2022 Form 10-K”),

as updated by the risk factors discussed in Part II, Item 1A of our Quarterly Report on Form 10-Q

for the quarter ended June 30, 2023 and in this Quarterly Report on Form 10-Q,

as well as in our other filings with the SEC.

You should read the 2022 Form 10-K,

this Quarterly Report, and the other documents that we file or have filed with the SEC, with the understanding that our actual future results may be materially different from the results expressed or implied by these forward-looking statements.

Moreover, we operate in an evolving environment.

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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.

What changed 10-Q

Item 1. Financial Statements