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Item 7. Management’s Discussion and Analysis

2025-02-12 compared with 2024-03-21 · 76 added, 63 removed, 191 unchanged (42% of the section changed)

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This discussion contains forward-looking statements that involve risks and uncertainties, including those described in the section entitled “ Forward-Looking Statements and Market Data .” As a result of many factors, including those factors set forth in the “ Risk Factors ” section of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by abnormally elevated aldosterone.

Our clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, highly selective ASI that we are initially developing for the treatment of cardiorenal conditions affected by abnormally elevated aldosterone, including hypertension and CKD.

In the United States,

there are over 115 million patients who have sustained elevated BP, or hypertension, and more than half of this population fails to achieve their BP goals, defined as BP of below 130/80 mmHg, with currently available medications.

We are a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by dysregulated aldosterone.

Our clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, highly selective ASI that we are developing for the treatment of cardiorenal conditions affected by dysregulated aldosterone, including hypertension, CKD, and OSA.

In the United States, there are approximately

120 million patients have sustained elevated BP, or hypertension, and more than half of this population fails to achieve their BP goals, defined as BP below 130/80 mmHg, with currently available medications.

There are over 30 million treated patients who do not achieve their BP goal, of whom approximately 20 million have systolic BP levels greater than 140 mmHg.

Patients with hypertension that persists despite taking two or more medications have 1.8 and 2.5 times greater mortality risk due to either cardiovascular disease or stroke, respectively.

In a Phase 2 proof-of-concept clinical trial evaluating 200 subjects with uHTN or rHTN, lorundrostat demonstrated a clinically meaningful and statistically significant reduction in BP with once-daily dosing and was well tolerated.

Abnormally elevated aldosterone levels are a key factor in driving hypertension in approximately 25% of hypertensive patients.

In addition to hypertension, we intend to investigate the benefits of lorundrostat in subjects with hypertension and CKD.

In a Phase 2 proof-of-concept clinical trial evaluating 200 subjects (Target-HTN) with uHTN or rHTN, lorundrostat demonstrated a clinically meaningful and statistically significant reduction in BP with once-daily dosing and was well tolerated.

Dysregulated aldosterone levels are a key factor in driving hypertension in approximately 30% of hypertensive patients.

In addition to hypertension, we are investigating the benefits of lorundrostat in subjects with hypertension and CKD and in subjects with hypertension and OSA.

We believe that our product candidate holds promise to be an innovative solution for the rapidly growing unmet need in multiple cardiorenal metabolic disorders.

Clinical Highlights

Pivotal Hypertension Program

In April 2023, we initiated our first pivotal trial, Advance-HTN, a randomized, double-blind, placebo-controlled Phase 2 clinical trial to evaluate the safety and efficacy of lorundrostat for the treatment of uHTN or rHTN, when used as an add-on therapy to a standardized background treatment of two or three antihypertensive medications in 261 adult subjects.

Subjects who meet screening criteria, will have their existing hypertension medications discontinued and start on a standard regimen of an ARB and a diuretic, if previously on two medications, or a standard regimen of ARB, diuretic and calcium channel blocker if previously on three to five medications.

Subjects who remain hypertensive, despite the standardized regimen are then randomized into three cohorts and treated for twelve weeks:

Advance-HTN is a randomized, double-blind, placebo-controlled Phase 2 clinical trial to evaluate the efficacy and safety of lorundrostat for the treatment of uHTN or rHTN, when used as an add-on therapy to a standardized background treatment of two or three antihypertensive medications.

Subjects who met screening criteria discontinued their existing hypertension medications and started on a standard regimen of an ARB and a diuretic, if previously on two medications, or a standard regimen of ARB, diuretic and calcium channel blocker if previously on three to five medications.

Subjects who remained hypertensive despite the standardized regimen were then randomized into three cohorts for twelve weeks receiving one of the following treatments:

lorundrostat 50 mg QD, lorundrostat 50 mg QD and an option to titrate to 100 mg QD at week four based on defined criteria or placebo.

The primary endpoint of the trial will be change in 24-hour ambulatory systolic BP at week twelve from baseline for active cohorts versus placebo.

Topline data from this trial is anticipated in the fourth quarter of 2024.

In December 2023, we also initiated our second pivotal trial, Launch-HTN, a randomized, double-blind, placebo-controlled Phase 3 clinical trial to evaluate the safety and efficacy of lorundrostat for the treatment of uHTN or rHTN, when used as an add-on therapy to their existing, prescribed background treatment of two to five antihypertensive medications in up to approximately 1,000 adult subjects.

Subjects are then randomized into three cohorts and treated for twelve weeks:

The primary endpoint of Advance-HTN is change in 24-hour ambulatory systolic BP at week twelve from baseline for each active cohort versus placebo.

Randomization of 285 subjects was completed in the fourth quarter of 2024, and topline data from this trial is anticipated in March 2025.

Our second pivotal trial, Launch-HTN, is a global, randomized, double-blind, placebo-controlled Phase 3 clinical trial to evaluate the efficacy and safety of lorundrostat for the treatment of uHTN or rHTN, when used as an add-on therapy to their existing, prescribed background treatment of two to five antihypertensive medications.

Subjects were randomized into three cohorts for twelve weeks receiving one of the following treatments:

lorundrostat 50 mg QD, lorundrostat 50 mg QD and an option to titrate to 100 mg QD at week six based on defined criteria or placebo.

The primary endpoint of the trial will be change in office measured systolic BP at week twelve from baseline for active cohorts versus placebo.

Topline data from this trial is expected in the second half of 2025.

In mid-2023, we initiated an open-label extension trial to allow subjects to continue to receive lorundrostat and obtain long-term safety and efficacy data.

The primary endpoint of the trial is the assessment of automated office measured systolic BP from baseline for active cohorts versus placebo at six weeks, with the results pooled for all subjects on 50 mg QD.

Randomization of 1,083 subjects was completed in the fourth quarter of 2024, and topline data from this trial is anticipated in mid first half of 2025.

Explore-CKD is a randomized, double-blind, placebo-controlled, two-period, two-sequence (2x2) crossover trial designed to evaluate the safety and efficacy of 25 mg QD lorundrostat in addition to an SGLT2 inhibitor for the treatment of hypertension in subjects with Stage 2 to 3b CKD and albuminuria despite receiving stable treatment with an ACE inhibitor or ARB.

The primary endpoint is placebo-adjusted change from baseline in systolic BP at week four and an exploratory endpoint is placebo-adjusted percent change from baseline in urine albumin-to-creatinine ratio at week four.

Randomization of 60 subjects was completed in the first quarter of 2025, and topline data from this trial is anticipated in the second quarter of 2025.

Transform-HTN is an open-label extension trial allowing subjects to continue to receive lorundrostat and to obtain long-term efficacy and safety data.

All subjects in the pivotal hypertension program, including the Advance-HTN and Launch-HTN trials, as well as the Explore-CKD trial, will be given the opportunity to participate in the extension trial.

Other Indications

Lorundrostat has been developed to normalize the production of aldosterone, and we believe this mechanism can be applied to other indications where abnormal aldosterone biology plays a role, including CKD and cardiorenal indications.

The Explore-CKD trial is designed to evaluate lorundrostat in hypertensive subjects with Stage 2 to 3b CKD.

The Phase 2 clinical trial is being modified from its original design to enroll both naïve to and patients on SGLT2 inhibitors.

This change reflects how SGLT2 inhibitors have quickly become standard of care for patients with CKD.

We will also have all study participants stay on an SGLT2 inhibitor throughout the course of the trial.

We have also decided to lower the eGFR criteria for the proof-of-concept study from 45ml/

min/1.73m2 to 30ml/min/1.73m2 and have eliminated the original Part B profiling portion of the study.

Lastly, the study periods will be reduced from eight weeks to four weeks which we believe will provide ample time to demonstrate clinical benefit on BP reduction and kidney benefit.

The primary endpoint remains change in systolic BP and an exploratory endpoint is percent change from baseline in 24-hour urinary albumin creatinine ratio at week four.

As this is an exploratory trial, interim data analyses may be conducted at one or more points in time.

Topline data from this trial continues to be anticipated between the fourth quarter of 2024 and the first quarter of 2025.

Lorundrostat has been developed to address dysregulated aldosterone, and we believe this mechanism may be applicable to other indications where dysregulated aldosterone biology plays a role.

Most recently, we have begun to explore lorundrostat for patients with OSA and hypertension.

In January 2025, we announced that the FDA cleared our IND for Explore-OSA to evaluate the effect of lorundrostat in the treatment of subjects with moderate-to-severe OSA and hypertension.

We anticipate initiating Explore-OSA in the first quarter of 2025.

Explore-OSA is planned to be a placebo-controlled, crossover trial to evaluate the safety and efficacy of lorundrostat 50 mg taken once daily in the evening in approximately 40 subjects with moderate-to-severe OSA.

Subjects will be at least 18 years old, with a BMI ≥27 kg/m 2 , and the trial will be conducted across approximately 40 sites.

The key objective of this trial is to evaluate the hypothesis that lorundrostat both alleviates the severity of upper airway obstruction and reduces nocturnal hypertension.

The primary outcome measure is absolute change in the frequency of apnea-hypopnea episodes compared to placebo.

The key secondary objective is to quantify BP throughout the night using continuous BP monitoring during performance of a standard sleep study without the use of CPAP.

Standard patient reported outcomes specific to OSA will also be assessed.

Financial Overview

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Including the option exercise, our aggregate net proceeds from the IPO were approximately $201.4 million, net of underwriting discounts, commissions, and offering costs.

In February 2024, we sold 8,339,169 shares of common stock and, to certain purchasers, 549,755 pre-funded warrants to purchase common stock for aggregate gross proceeds of approximately $120.0 million, before deducting offering expenses, in a private placement.

In February 2024, we sold 8,339,169 shares of common stock and, to certain purchasers, 549,755 pre-funded warrants to purchase common stock for aggregate net proceeds of approximately $116.1 million, net of offering expenses, in a private placement offering (the Private Placement).

We do not have any products approved for sale, have not generated any revenue, and have incurred net losses since our inception.

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Our net losses for the years ended December 31, 2024 and 2023 were $177.8 million and $71.9 million, respectively.

As of December 31, 2023 and December 31, 2022, we had an accumulated deficit of $124.7 million and $52.8 million, respectively.

As of December 31, 2024 and 2023, we had an accumulated deficit of $302.5 million and $124.7 million, respectively.

Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical development activities and other research and development activities.

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However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.

Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

For more information, see “ Liquidity and Capital Resources .

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Such royalties are subject to reduction under specified conditions, including lack of patent coverage and generic competition.

We incurred $9.0 million and $0 of research and development expenses related to the Mitsubishi License during the years ended December 31, 2023 and 2022, respectively.

The development milestones of $4.0 million and $5.0 million were achieved in March 2023 and December 2023, respectively, and related to the initiation of our pivotal clinical program of lorundrostat.

These payments satisfied in full the aggregate development milestone payments described above.

We incurred $0 and $9.0 million of research and development expenses pursuant to the Mitsubishi License during the years ended December 31, 2024 and 2023, respectively, that related to the initiation of our pivotal clinical program of lorundrostat in 2023.

As of December 31, 2024, we have paid an aggregate of $9.0 million in development milestone payments and have no remaining development milestone obligations under the Mitsubishi License.

We are obligated to use commercially reasonable efforts to conduct and complete the development activities and to file for regulatory approval for at least one Lorundrostat Product in a major market country and consider in good faith developing at least one Lorundrostat Product in a non-major market country.

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Private Placement Offering

On February 7, 2024, we entered into a securities purchase agreement (the Purchase Agreement) with the purchasers named therein (the Purchasers), for the private placement (the Private Placement) of (i) 8,339,169 shares (the Shares) of our common stock at a price of $13.50 per Share, and (ii) with respect to certain Purchasers, Pre-Funded Warrants to purchase an aggregate of 549,755 shares of common stock (the Pre-Funded Warrants) in lieu of shares of common stock, at a purchase price of $13.499 per Pre-Funded Warrant (the shares of common stock issuable upon exercise of the Pre-Funded Warrants, the Warrant Shares) for aggregate gross proceeds of approximately $120.0 million, before deducting offering expenses.

We expect to use the net proceeds from the Private Placement to fund the research and development of lorundrostat and for working capital and general corporate purposes.

On February 7, 2024, we entered into a securities purchase agreement (the Purchase Agreement) with the purchasers named therein (the Purchasers), for the Private Placement of (i) 8,339,169 shares (the Shares) of our common stock at a price of $13.50 per Share, and (ii) with respect to certain Purchasers, Pre-Funded Warrants to purchase an aggregate of 549,755 shares of common stock (the Pre-Funded Warrants) in lieu of shares of common stock, at a purchase price of $13.499 per Pre-Funded Warrant (the shares of common stock issuable upon exercise of the Pre-Funded Warrants, the Warrant Shares) for aggregate net proceeds of approximately $116.1 million.

We are using the net proceeds from the Private Placement to fund the research and development of lorundrostat and for working capital and general corporate purposes.

Each Pre-Funded Warrant has an exercise price of $0.001 per share of common stock, is immediately exercisable on the date of issuance, and will not expire.

Under the terms of the Pre-Funded Warrants, we may not effect the exercise of any portion of any Pre-Funded Warrant, and a holder will not have the right to exercise any portion of any Pre-Funded Warrant, which, upon giving effect to such exercise, would cause a holder (together with its affiliates) to own more than a specified beneficial ownership limitation of either 4.99%, 9.99% or 19.99% (as selected by such holder prior to the issuance of the Pre-Funded Warrant) of the number of shares of common stock outstanding immediately after giving effect to such exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants.

However, any holder may increase or

decrease such percentage to any other percentage not in excess of 19.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to us.

Pursuant to the Purchase Agreement, the Company agreed to file a registration statement with the SEC within 60 days after the closing of the Private Placement (subject to certain exceptions) for purposes of registering the resale of the Shares and the Warrant Shares, to use its reasonable best efforts to have such registration statement declared effective within the time period set forth in the Purchase Agreement, and to keep such registration statement effective until the earliest of (i) the time as all of the Shares and Warrant Shares purchased by the Purchasers pursuant to the terms of the Purchase Agreement have been sold pursuant to the registration statement, or (ii) such time as the Shares and Warrant Shares become eligible for resale by non-affiliates without any volume limitations or other restrictions pursuant to Rule 144 under the Securities Act or any other rule of similar effect.

Under the terms of the Pre-Funded Warrants, we may not effect the exercise of any portion of any Pre-Funded Warrant, and a holder will not have the right to exercise any portion of any Pre-Funded Warrant, which, upon giving effect to such exercise, would cause a holder (together with its affiliates) to own more than a specified beneficial ownership limitation of either 4.99%, 9.99%, or 19.99% (as selected by such holder prior to the issuance of the Pre-Funded Warrant) of the number of shares of common stock outstanding immediately after giving effect to such exercise, as such percentage

ownership is determined in accordance with the terms of the Pre-Funded Warrants.

However, any holder may increase or decrease such percentage to any other percentage not in excess of 19.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to us.

We registered the resale of the Shares and the Warrant Shares on a shelf registration statement on Form S-3 (Registration No.

333-278122), which was declared effective by the SEC on April 11, 2024 (the Registration Statement).

Pursuant to the Purchase Agreement, we agreed to use our reasonable best efforts to keep the Registration Statement effective until the earliest of (i) the time as all of the Shares and Warrant Shares purchased by the Purchasers pursuant to the terms of the Purchase Agreement have been sold pursuant to the Registration Statement, or (ii) such time as the Shares and Warrant Shares become eligible for resale by non-affiliates without any volume limitations or other restrictions pursuant to Rule 144 under the Securities Act or any other rule of similar effect.

At Market Equity Offering Sales Agreement

On March 21, 2024, we entered into an ATM Equity Offering Sales Agreement (the ATM Agreement) with BofA Securities, Inc.

and Evercore Group L.L.C.

as our sales agents (the Agents) and/or principals.

Pursuant to the terms of the ATM Agreement, we may sell from time to time through the Agents shares of our common stock having an aggregate offering price of up to $100,000,000 (the ATM Shares).

Any ATM Shares will be issued pursuant to the Registration Statement.

Sales of the ATM Shares, if any, will be made by means of ordinary brokers’ transactions on the Nasdaq Global Select Market or as otherwise agreed by us and the Agents.

Under the terms of the ATM Agreement, we may also sell the ATM Shares from time to time to an Agent as principal for its own account at a price to be agreed upon at the time of sale.

Any sale of the ATM Shares to an Agent as principal would be pursuant to the terms of a separate terms agreement between us and such Agent.

We have not yet sold any ATM Shares as of December 31, 2024.

Key Components of Results of Operations

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• costs related to manufacturing lorundrostat for our clinical trials.

We plan to substantially increase our research and development expenses for the foreseeable future as we continue the development of lorundrostat.

We have and plan to continue to substantially increase our research and development expenses for the foreseeable future as we continue the development of lorundrostat.

We cannot determine with certainty the timing of initiation, the duration, or the completion costs of current or future clinical trials and preclinical studies of lorundrostat or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development.

Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations.

In addition, we cannot forecast whether lorundrostat or any future product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

In addition, we cannot forecast whether lorundrostat or any future product candidates may be subject to future collaborations, when such arrangements will be

secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Our future development costs may vary significantly based on factors such as:

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We expect our general and administrative expenses will increase for the foreseeable future to support our increased research and development activities, manufacturing activities, and the increased costs associated with operating as a public company.

These increased costs will likely include increased expenses related to the hiring of additional personnel, audit, legal, regulatory, and tax-related services associated with maintaining compliance with the exchange listing and the SEC requirements and requirements of the Sarbanes-Oxley Act of 2002, director and officer insurance costs, and investor and public relations costs.

Other Income, Net

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treasuries, net of fees, or other related expenses.

Results of Operations

Comparison of the Years Ended December 31, 2024 and 2023

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Research and Development Expenses

Research and development expenses increased by $44.1 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, which was primarily due to increases of $21.4 million in preclinical and clinical costs, driven by the initiation of the lorundrostat pivotal program beginning in the second quarter of 2023, $9.0 million in license fees under the Mitsubishi License upon achieving a development milestones of lorundrostat in March and December of 2023, $7.8 million in clinical supply, manufacturing, and regulatory costs, $5.6 million in higher compensation expense resulting from additions to headcount and stock-based compensation, and $0.3 million in other research and development expenses.

Research and development expenses increased by $98.2 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, which was primarily due to increases of $88.7 million in preclinical and clinical costs, driven by the initiation of the lorundrostat pivotal program in the second quarter of 2023, $10.6 million in clinical supply, manufacturing, and regulatory costs, $7.0 million in higher compensation expense resulting from additions to headcount, increases in salaries and accrued bonuses, and increased stock-based compensation, and $0.9 million in other research and development expenses, partially offset by a decrease of $9.0 million in license fees associated with development milestone payments in 2023 that did not recur in 2024.

General and Administrative Expenses

General and administrative expenses increased by $9.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.

The increase was primarily due to $3.8 million in higher professional fees associated with operating as a public company, $3.4 million in higher compensation expense resulting from additions to headcount and stock-based compensation, $1.1 million of higher insurance expense primarily associated with new director and officer insurance policies, and $0.8 million in higher other administrative expenses.

The increase was primarily due to $6.6 million in higher compensation expense resulting from additions to headcount, increases in salaries and accrued bonuses, and increased stock-based compensation, $2.6 million in higher professional fees, and $0.3 million in higher other administrative expenses.

Total Other Income, Net

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In February 2023, we completed our IPO of 13,800,000 shares of our common stock sold at a price to the public of $16.00 per share, including the exercise in full by the underwriters of their option to purchase 1,800,000 additional shares of our common stock, for net proceeds of approximately $201.4 million, net of underwriting discounts, commissions, and offering costs.

In February 2024, we sold 8,339,169 Shares and, to certain Purchasers, 549,755 Pre-Funded Warrants for aggregate gross proceeds of approximately $120.0 million, before deducting offering expenses, in a private placement.

In February 2024, we sold 8,339,169 Shares and, to certain Purchasers, 549,755 Pre-Funded Warrants for aggregate net proceeds of approximately $116.1 million in the Private Placement.

Our primary uses of cash to date have been to fund our research and development activities, including with respect to lorundrostat, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.

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• the costs, timing, and outcome of regulatory meetings and reviews of lorundrostat or any future product candidates;

• any delays and cost increases that may result from any pandemic or other healthcare emergency;

• the costs of obtaining, maintaining, enforcing, and protecting our patents and other intellectual property and proprietary rights;

• our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal control over financial reporting;

• the costs associated with hiring additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, CMC, quality, and commercial personnel;

• the timing and amount of the milestone, royalty, or other payments we must make to Mitsubishi Tanabe, from whom we have in-licensed lorundrostat, or any future licensors;

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• costs associated with any products or technologies that we may in-license or acquire;

• the other risks and uncertainties described under the heading “ Risk Factors , ” “ Forward-Looking Statements and Market Data ,” and elsewhere in this Annual Report.

• any delays and cost increases that may result from any pandemic or other healthcare emergency;

• the other risks and uncertainties described under the heading “ Risk Factor s ,” “ Forward-Looking Statements and Market Data , ” and elsewhere in this Annual Report.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements.

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Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, inflation, elevated interest rates, geopolitical conflict in and around Ukraine, Israel, and other areas of the world, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from factors that include but are not limited to, geopolitical conflict in and around Ukraine, Israel, and other areas of the world, inflation, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability.

If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive.

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Since our inception, we have primarily used our available cash to fund expenditures related to the in-license and development of lorundrostat.

The following table sets forth a summary of cash flows for the periods presented:

(in thousands)

The following table sets forth a summary of cash flows for the years presented (in thousands):

2024 2023 Change

Net cash provided by (used in):

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Operating Activities

Net cash used in operating activities of $81.2 million during the year ended December 31, 2023 increased, compared to $29.2 million during the year ended December 31, 2022, which was primarily attributable to an increase in cash used to support our operating activities, including but not limited to, the development of lorundrostat and related clinical trial expenses, personnel and compensation expense, legal and professional fees to support our operations, and general working capital requirements.

Net cash used in operating activities was $166.3 million during the year ended December 31, 2024, compared to $81.2 million during the year ended December 31, 2023, which was primarily attributable to an increase in cash used to support our operating activities, including but not limited to, the development of lorundrostat and related clinical trial expenses, personnel and compensation expense, legal and professional fees to support our operations, and general working capital requirements.

The $85.1 million increase in cash used consisted of an increase in net loss, adjusted for non-cash expenses, of approximately $102.1 million, and the net effect of changes in working capital of $17.0 million.

Investing Activities

Net cash used in investing activities of $160.5 million during the year ended December 31, 2023 increased, compared to $21.8 million during the year ended December 31, 2022, which was attributable to increased purchases of marketable securities of $276.2 million during the year ended December 31, 2023 subsequent to receiving cash proceeds from our IPO in February 2023, partially offset by increased maturities of marketable securities of $137.5 million during the year ended December 31, 2023.

Net cash provided by investing activities was $115.0 million during the year ended December 31, 2024, compared to net cash used of $160.5 million during the year ended December 31, 2023.

The change in cash provided by investing activities was primarily attributable to the timing and amount of purchases and maturities of marketable securities in each year.

During the year ended December 31, 2024 compared to the year ended December 31, 2023, an increase in maturities of prior purchases of $301.0 million and a decrease in purchases of $25.5 million occurred.

Financing Activities

Net cash provided by financing activities of $203.2 million during the year ended December 31, 2023 increased, compared to $128.0 million during the year ended December 31, 2022.

During the year ended December 31, 2023, we received net proceeds of $203.0 million from the sale of our common stock in our IPO in February 2023.

During the year ended December 31, 2022, we received $129.6 million in net proceeds from the issuance and sale of our Series A and Series B convertible preferred stock.

Net cash provided by financing activities of $116.1 million during the year ended December 31, 2024 decreased, compared to $203.2 million during the year ended December 31, 2023.

During the year ended December 31, 2024, we received net proceeds of $116.1 million from the sale of Shares and Pre-Funded Warrants in the Private Placement, and during the year ended December 31, 2023, we received aggregate net proceeds of $203.0 million from the sale of our common stock in our IPO in February 2023.

Contractual Obligations and Commitments

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Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized.

These inputs are

subjective and generally require significant analysis and judgment to develop.

These inputs are subjective and generally require significant analysis and judgment to develop.

“ Summary of Significant Accounting Policies ” of the notes to our financial statements included elsewhere in this Annual Report for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted during 2024 and 2023.

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We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if, among other factors, the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year (subject to certain conditions), or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

if, among other factors, the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year (subject to certain conditions), or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a smaller reporting company as defined in the Exchange Act.

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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-K

Item 7. Management’s Discussion and Analysis