What changed in this filing

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Item 1. Financial Statements

2023-11-13 compared with 2023-08-10 · 146 added, 117 removed, 502 unchanged (34% of the section changed)

3 unchanged sentences

(In thousands, except share and par value data)

September 30,

Current assets:

19 unchanged sentences

200,000,000 shares authorized at

June 30, 2023 and December 31, 2022;

September 30, 2023 and December 31, 2022;

33,872,166 and 24,699,553 shares

issued and outstanding at June 30, 2023 and December 31, 2022,

issued and outstanding at September 30, 2023 and December 31, 2022,

Additional paid-in capital

7 unchanged sentences

(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:

3 unchanged sentences

Loss from operations

Unrealized (loss) gain on short-term investments

Unrealized gain (loss) on short-term investments

Comprehensive loss

26 unchanged sentences

Balances, June 30, 2023

Stock based compensation

Issuance of common stock in

connection with equity plans

Other comprehensive income

Balances, September 30, 2023

RENEO PHARMACEUTICALS, INC.

15 unchanged sentences

Balances, June 30, 2022

Stock based compensation

Issuance of common stock in

connection with equity plans

Other comprehensive loss

Balances, September 30, 2022

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

2 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

15 unchanged sentences

Proceeds from maturities of available-for-sale short-term investments

Net cash (used in) provided by investing activities

Net cash used in by investing activities

Cash flows from financing activities

20 unchanged sentences

From its inception in 2014, the Company has incurred significant losses and negative cash flows from operations.

For the three and six months ended June 30, 2023, the Company had a net loss of $ 19.5 million and $ 34.6 million, respectively, and used $ 25.2 million cash in operating activities during the six months ended June 30, 2023.

Since inception through June 30, 2023, the Company had an accumulated deficit of $ 171.3 million.

For the three and nine months ended September 30, 2023, the Company had a net loss of $ 19.2 million and $ 53.8 million, respectively, and used $ 43.9 million of cash in operating activities during the nine months ended September 30, 2023.

As of September 30, 2023, the Company had an accumulated deficit of $ 190.5 million.

The Company follows Accounting Standards Codification (ASC) Topic 205-40, Presentation of Financial Statements—Going Concern , which requires that management perform a two-step analysis over its ability to continue as a going concern.

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If management concludes that substantial doubt is raised, management is also required to consider whether its plans alleviate that doubt (step 2).

As of June 30, 2023, the Company had cash, cash equivalents and short-term investments of $ 142.7 million, which the Company expects are sufficient to fund operations beyond the potential submission of a new drug application for mavodelpar for treatment of primary mitochondrial myopathies in the United States anticipated in the first half of 2024.

However, based on the anticipated increase in sales and marketing expenses for mavodelpar, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for more than one year from the date of the filing of this Quarterly Report on Form 10-Q.

As of September 30, 2023, the Company had cash, cash equivalents and short-term investments of $ 125.6 million, which the Company expects are sufficient to fund operations through the potential submission of a new drug application for mavodelpar for the treatment of primary mitochondrial myopathies in the United States anticipated in the first half of 2024, however, based on the anticipated increase in commercial development expenses for mavodelpar, not for more than one year from the date of the filing of this Quarterly Report on Form 10-Q.

Accordingly, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern.

Management plans to alleviate this risk by raising additional capital through public or private equity offerings or debt financings, credit or loan facilities, collaborations, strategic alliances, licensing arrangements or a combination of one or more of these funding sources.

In addition, the Company has the ability to defer certain commercial activities until additional capital is received.

In addition, the Company has the ability to defer certain commercial development activities until additional capital is received.

There can be no assurance that the Company will be successful in obtaining additional funding, that the Company’s projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

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Any of these actions could negatively impact the Company’s business, results of operations, and future prospects.

The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions, disruptions to, and volatility in, financial markets in the United States and worldwide, including those resulting from infectious diseases, bank failures, actual or perceived changes in interest rates and economic inflation.

The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions, disruptions to, and volatility in, financial markets in the United States and worldwide, including those resulting from armed conflicts, infectious diseases, bank failures, actual or perceived changes in interest rates and economic inflation.

The Company may not be able to secure additional financing in a timely manner or on favorable terms, if at all.

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Interim results are not necessarily indicative of results that may be expected for any other interim period or for an entire year.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of June 30, 2023 ;

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of September 30, 2023 ;

all intercompany transactions and balances have been eliminated.

Summary of Significant Accounting Policies

The significant accounting policies used in the preparation of these consolidated financial statements for the six months ended June 30, 2023 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

The significant accounting policies used in the preparation of these consolidated financial statements for the nine months ended September 30, 2023 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

New Accounting Pronouncements

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Diluted net loss per share assumes the conversion, exercise or issuance of all potential common stock equivalents, unless the effect of inclusion would be anti-dilutive.

For purposes of this calculation, common stock shares to be issued upon exercise of all outstanding stock options and restricted stock units were excluded from the diluted net loss per share calculation for the three and six months ended June 30, 2023 and 2022 because such shares are anti-dilutive.

For purposes of this calculation, common stock shares to be issued upon exercise of all outstanding stock options and restricted stock units were excluded from the diluted net loss per share calculation for the three and nine months ended September 30, 2023 and 2022 because such shares are anti-dilutive.

Historical outstanding anti-dilutive securities not included in the diluted net loss per share calculation include the following:

As of June 30,

As of September 30,

Common stock options outstanding

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The Performance Award is required to be measured at fair value on a recurring basis each reporting period, with changes in the fair value recognized in general and administrative expense in the consolidated statements of operations and comprehensive loss over the derived service period of the award.

No assets or liabilities were transferred into or out of their classifications during the six months ended June 30, 2023.

The recurring fair value measurement of the Company’s assets and liabilities measured at fair value at June 30, 2023 consisted of the following (in thousands):

No assets or liabilities were transferred into or out of their classifications during the nine months ended September 30, 2023.

The recurring fair value measurement of the Company’s assets and liabilities measured at fair value at September 30, 2023 consisted of the following (in thousands):

Quoted Prices in

19 unchanged sentences

Performance award

The following table summarizes changes in fair value measurements of the Performance Award during the six months ended June 30, 2023 (in thousands):

The following table summarizes changes in fair value measurements of the Performance Award during the nine months ended September 30, 2023 (in thousands):

Balance as of January 1, 2023

Change in fair value

Balance as of June 30, 2023

Balance as of September 30, 2023

Marketable Debt Securities

2 unchanged sentences

The following tables summarize the gross unrealized gains and losses of the Company’s available-for-sale securities (in thousands):

As of June 30, 2023

As of September 30, 2023

Available-for-sale securities:

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Accrued expenses consisted of the following (in thousands):

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

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The Company’s headquarters are located in Irvine, California, where it leases office space.

As of June 30, 2023, the Company leased additional office space located in San Diego, California and in Sandwich, United Kingdom.

The lease terms for the Irvine, San Diego, and Sandwich offices extend through November 30, 2026, July 31, 2023, and October 23, 2027, respectively.

The Company did not renew the office space located in San Diego upon the expiration of the lease.

The Company leases additional office space located in Sandwich, United Kingdom.

The lease terms for the Irvine and Sandwich offices extend through November 30, 2026 and October 23, 2027, respectively.

Other information related to the Company ’s operating leases as of the balance sheet dates presented are as follows:

As of June 30,

As of September 30,

Weighted incremental borrowing rate

3 unchanged sentences

Maturities of lease liabilities by fiscal year for the Company ’s operating leases are as follows (in thousands):

As of June 30, 2023

2023 (remaining six months)

As of September 30, 2023

2023 (remaining three months)

Total lease payments

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In March 2021, the Company’s board of directors adopted the Company’s 2021 Equity Incentive Plan (2021 Plan), which is the successor to the Company’s 2014 Equity Incentive Plan (2014 Plan).

As of the effective date of

the 2021 Plan, awards granted under the 2014 Plan that are forfeited or otherwise become available under the 2014 Plan will be included and available for issuance under the 2021 Plan.

As of the effective date of the 2021 Plan, awards granted under the 2014 Plan that are forfeited or otherwise become available under the 2014 Plan will be included and available for issuance under the 2021 Plan.

Under the 2021 Plan, the Company may grant stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other awards to individuals who are employees, officers, directors or consultants of the Company and its affiliates.

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The shares purchased by the employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until those shares vest.

As of June 30, 2023 , there were no unvested shares of common stock outstanding that were issued pursuant to the early exercise of stock options.

As of September 30, 2023 , there were no unvested shares of common stock outstanding that were issued pursuant to the early exercise of stock options.

Shares Reserved for Future Issuance

As of June 30, 2023, the Company had reserved shares of its common stock for future issuance as follows:

As of September 30, 2023, the Company had reserved shares of its common stock for future issuance as follows:

Common stock options outstanding

4 unchanged sentences

Stock Options

A summary of the Company’s stock option activity and related information during the six months ended June 30, 2023 is as follows:

A summary of the Company’s stock option activity and related information during the nine months ended September 30, 2023 is as follows:

Contractual Term (in years)

2 unchanged sentences

Forfeited/Expired

Outstanding at June 30, 2023

Vested at June 30, 2023

Exercisable at June 30, 2023

Options exercisable at June 30, 2023 include vested options and options eligible for early exercise.

All outstanding options as of June 30, 2023 are expected to vest.

Unrecognized stock-based compensation expense at June 30, 2023 was $ 9.9 million, which is expected to be recognized over a weighted-average vesting term of 2.6 years.

Outstanding at September 30, 2023

Vested at September 30, 2023

Exercisable at September 30, 2023

Options exercisable at September 30, 2023 include vested options and options eligible for early exercise.

All outstanding options as of September 30, 2023 are expected to vest.

Unrecognized stock-based compensation expense at September 30, 2023 was $ 9.5 million, which is expected to be recognized over a weighted-average vesting term of 2.4 years.

The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee stock option grants were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Risk-free interest rate

16 unchanged sentences

Restricted Stock Units (RSUs)

RSUs consist of performance-based units (PSUs) and market-based units (MSUs).

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

RSUs consist of time-based units (TSUs), performance-based units (PSUs) and market-based units (MSUs).

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

Weighted-Average

Unvested at December 31, 2022

Unvested at June 30, 2023

Unvested at September 30, 2023

Time-Based Units

TSUs typically vest over four years , with 25 % vesting on the one-year anniversary of the employee’s hire date and the remainder vesting monthly or quarterly over the following three years subject to the employee’s continued employment with the Company through the vesting dates.

The fair value of the awards was based on the value of the Company’s common stock at the grant date of the award and expense is recognized on a

straight-line basis.

The Company had 57,000 unvested shares underlying TSUs as of September 30, 2023.

Unrecognized stock-based compensation expense at September 30, 2023 was $ 0.4 million, which is expected to be recognized over a weighted-average vesting term of 2.1 years.

Stock-based compensation expense related to the TSUs during the three and nine months ended September 30, 2023 was immaterial.

Performance-Based Units

The vesting of the PSUs is based on the Company achieving certain regulatory milestones and are subject to the employee’s continued employment with the Company through the achievement date.

The vesting of the PSUs is based on the Company achieving certain milestones and are subject to the employee’s continued employment with the Company through the achievement date.

The fair value of the awards was based on the value of the Company’s common stock at the grant date of the award and expense recognition is based on the probability of achieving the performance conditions.

Stock-based compensation expense is adjusted in future periods for subsequent changes in the expected outcome of the performance conditions.

The Company had 244,500 unvested shares underlying PSUs as of June 30, 2023.

The Company concluded that achievement of the performance conditions was not probable as of June 30, 2023 , and therefore

no stock-based compensation expense was recognized for the three and six months ended June 30, 2023.

As of June 30, 2023, there was $ 1.6 million of unrecognized stock-based compensation expense related to the PSUs that were deemed not probable of vesting.

The Company had 264,500 unvested shares underlying PSUs as of September 30, 2023.

The Company concluded that achievement of the performance conditions was not probable as of September 30, 2023 , and therefore no stock-based compensation expense was recognized for the three and nine months ended September 30, 2023.

As of September 30, 2023, there was $ 1.7 million of unrecognized stock-based compensation expense related to the PSUs that were deemed not probable of vesting.

Market-Based Units

2 unchanged sentences

Stock-based compensation expense is recognized over the derived service period of approximately 3 years.

The Company had 120,000 unvested shares underlying MSUs as of June 30, 2023.

Stock-based compensation expense related to the MSUs during the three and six months ended June 30, 2023 was immaterial.

As of June 30, 2023, there was $ 0.2 million of unrecognized stock-based compensation expense related to MSUs.

The Company had 120,000 unvested shares underlying MSUs as of September 30, 2023.

Stock-based compensation expense related to the MSUs during the three and nine months ended September 30, 2023 was immaterial.

As of September 30, 2023, there was $ 0.2 million of unrecognized stock-based compensation expense related to MSUs.

Performance Award

5 unchanged sentences

The Company estimated the fair value of the Performance Award at each reporting period using the Monte Carlo simulation (Note 4), which is recognized as stock-based compensation expense over the derived service period.

The Company recognized approximately $ 0.6 million and $ 0.8 million in compensation expense related to the change in the fair value of the Performance Award for the three and six months ended June 30, 2023, respectively.

The Company recognized approximately $ 0.2 million and $ 1.0 million in compensation expense related to the change in the fair value of the Performance Award for the three and nine months ended September 30, 2023, respectively.

The expense is reflected in consolidated statements of operations and comprehensive loss in the general and administrative expense.

1 unchanged sentence

In March 2021, the Company’s board of directors adopted the ESPP, which became effective immediately prior to the execution of the underwriting agreement in connection with the Company’s IPO.

During the six months ended June 30, 2023, 84,296 shares of common stock were purchased under the ESPP.

During the nine months ended September 30, 2023, 188,015 shares of common stock were purchased under the ESPP.

In September 2021, the Company’s board of directors adopted the Company’s 2021 United Kingdom Sharesave Sub-plan (SAYE).

An allocation of 25,875 shares of common stock from the ESPP reserve pool was approved and reserved for issuance under the SAYE.

No shares have been issued under the SAYE through June 30, 2023.

No shares have been issued under the SAYE through September 30, 2023.

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense, including expense associated with award modifications for unvested options, reflected in the consolidated statements of operations and comprehensive loss (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes stock-based compensation expense, including expense associated with options, TSUs, MSUs and award modifications for unvested options, reflected in the consolidated statements of operations and comprehensive loss (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

7 unchanged sentences

The Company is also required to pay vTv Therapeutics up to $ 30.0 million in total sales-based milestones upon achievement of certain sales thresholds of the licensed product.

As of June 30, 2023 , the Company has paid an aggregate of $ 2.0 million in development and regulatory milestone payments.

As of September 30, 2023 , the Company has paid an aggregate of $ 2.0 million in development and regulatory milestone payments.

In addition, the Company is obligated to make royalty payments to vTv Therapeutics at mid-single digit to low teen percentage royalty rates, based on tiers of annual net sales of licensed products, subject to certain customary reductions.

There were no milestone payments achieved or recorded for the three and six months ended June 30, 2023 and 2022 .

There were no milestone payments achieved or recorded for the three and nine months ended September 30, 2023 and 2022 .

Subsequent Events

On October 30, 2023, pursuant to a Common Stock Repurchase Agreement with vTv Therapeutics, the Company repurchased 576,443 shares of the Company’s common stock from vTv Therapeutics at a price of $ 7.64 per share for an aggregate purchase price of approximately $ 4.4 million.

The repurchase was made directly in a private, non-underwritten transaction.

Subsequently, the Company retired the repurchased shares.

On November 13, 2023, the Company entered into an at-the-market equity offering sales agreement (the 2023 ATM Facility) with Leerink Partners LLC (Leerink) under which the Company may offer and sell, from time to time, at its sole discretion, up to $ 100.0 million in shares of its common stock.

The Company has not yet sold any shares of its common stock under the 2023 ATM Facility.

Concurrently with entering into the 2023 ATM Facility, the Company and Leerink agreed to terminate the Company’s at-the-market equity offering sales agreement entered into on May 2, 2022, with Leerink (previously SVB Securities LLC) under which the Company could offer

and sell, from time to time, at its sole discretion, up to $ 20.0 million in shares of its common stock (the 2022 ATM Facility).

The Company had sold an aggregate of $ 1.2 million under the 2022 ATM Facility as of the termination date.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Compared to placebo, administration of mavodelpar resulted in statistically significant increases in expression of genes involved in mitochondrial oxidative phosphorylation, and statistically significant improvements in muscle strength.

Mavodelpar was studied in an open-label trial in patients with primary mitochondrial myopathies (PMM).

Mavodelpar was studied in an open-label trial in patients with primary mitochondrial myopathies (PMM) with confirmed mitochondrial gene defects.

Patients with PMM in this trial exhibited improved function, reduced symptoms, and increased expression of genes involved in mitochondrial function.

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We have received Fast Track designation for mavodelpar for the treatment of patients with PMM and LC-FAOD due to LCHAD deficiency, one of the predominant LC-FAOD genotypes.

We are continuing to collaborate with the U.S.

Food and Drug Administration (FDA) and European regulatory agencies to advance the LC-FAOD program which will include patients with LCHAD as well as other genotypes.

These discussions include obtaining alignment on the study design, patient population, and endpoints for the LC-FAOD program’s next clinical trial.

Mavodelpar for the Treatment of PMM

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Based on these results, we initiated the STRIDE study, a global, randomized, double-blind, placebo-controlled pivotal Phase 2b trial of mavodelpar in adult patients with PMM due to mtDNA defects.

We completed enrollment of 213 patients in March 2023, exceeding target enrollment of 200 patients, in the pivotal STRIDE study.

We anticipate announcement of topline results in the fourth quarter of 2023 and potential submission of a new drug application (NDA) in the first half of 2024.

We completed enrollment of 213 patients in March 2023, exceeding target enrollment of 200 patients, and expect to announce topline data in December 2023.

If successful, we anticipate potential submissions of a new drug application (NDA) in the first half of 2024 and a Marketing Authorization Application (MAA) in late 2024.

The STRIDE study is designed to investigate the efficacy and safety of 100 mg mavodelpar administered once-daily over a 24-week period.

The primary efficacy endpoint of the trial is the change from baseline in the distance walked during the 12MWT at week 24.

Key secondary endpoints include changes from baseline in PROMIS® Short Form Fatigue 13a, Modified Fatigue Impact Scale (MFIS), Patient Global Impression of Change (PGIC), Patient Global Impression of Severity (PGIS), 30 Second Sit-To-Stand (30STS) Test, Brief Pain Inventory (BPI), 36-Item Health Survey (SF-36), Work Productivity and Activity Impairment Questionnaire:

Secondary and exploratory endpoints include changes from baseline in PROMIS® Short Form Fatigue 13a, Modified Fatigue Impact Scale (MFIS), Patient Global Impression of Change (PGIC), Patient Global Impression of Severity (PGIS), 30 Second Sit-To-Stand (30STS) Test, Brief Pain Inventory (BPI), 36-Item Health Survey (SF-36), Work Productivity and Activity Impairment Questionnaire:

Specific Health Problem (WPAI:SHP), and Pedometer Step Count.

We are also conducting the STRIDE AHEAD study, a 24-month, open-label extension (OLE) trial outside of the United States in patients with PMM due to mtDNA.

We have enrolled over 130 patients, with over 90 patients reaching at least 6-months of long-term safety exposure in this study.

The STRIDE AHEAD study was recently amended to allow enrollment of patients with PMM due to nuclear DNA (nDNA) defects, and initiation of patient screening began in the second quarter of 2023.

Based on interactions with the FDA, European Medicines Agency (EMA), and several other national regulatory agencies in Europe, we believe that positive results from the ongoing pivotal STRIDE and STRIDE AHEAD studies could potentially support registration of mavodelpar for adult patients with PMM in the United States and Europe.

We intend to submit the data from STRIDE, together with the data from STRIDE AHEAD, to the FDA and the EMA in planned marketing applications in 2024.

We are also conducting the STRIDE AHEAD study, a 24-month, open-label extension (OLE) trial outside of the United States in patients with PMM due to mtDNA defects who participated in STRIDE or the mavodelpar Phase 1b study.

STRIDE AHEAD is designed to evaluate the long-term safety and tolerability of 100 mg mavodelpar administered once-daily over a 24-month period.

Over 65 patients have been treated beyond 52-weeks of dosing in this study.

The STRIDE AHEAD study has been amended to allow enrollment of patients with PMM due to nuclear DNA (nDNA) defects, and the first patient was dosed in November 2023.

Based on interactions with the U.S.

Food and Drug Administration (FDA), European Medicines Agency (EMA), and several other national regulatory agencies in Europe, we believe that positive results from the ongoing pivotal STRIDE and STRIDE AHEAD studies could potentially support registration of mavodelpar for adult patients with PMM in the United States and Europe.

We intend to submit the data from STRIDE, together with the data from STRIDE AHEAD, to the FDA in the first half of 2024 and the EMA in late 2024.

Mavodelpar for the Treatment of LC-FAOD

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We are also required to pay vTv Therapeutics up to $30.0 million in total sales-based milestones upon achievement of certain sales thresholds of the licensed product.

As of June 30, 2023, we have paid an aggregate of $2.0 million in development and regulatory milestone payments.

As of September 30, 2023, we have paid an aggregate of $2.0 million in development and regulatory milestone payments.

In addition, we are obligated to make tiered royalty payments to vTv Therapeutics at mid-single digit to low teen percentage royalty rates, based on tiers of annual net sales of licensed products, subject to certain customary reductions.

There were no milestone payments achieved or recorded for the three and six months ended June 30, 2023 and 2022.

There were no milestone payments achieved or recorded for the three and nine months ended September 30, 2023 and 2022.

Components of Our Results of Operations

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expenses related to medical affairs activities, including field teams to initiate relevant disease education and publications;

facility costs including rent, depreciation, and maintenance expenses;

depreciation and maintenance expenses;

fees for maintaining licenses under our third-party licensing agreements.

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The following table summarizes our research and development expenses (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Clinical and regulatory

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Results of Operations

Comparison of Three Months Ended June 30, 2023 and 2022 (Unaudited)

Comparison of Three Months Ended September 30, 2023 and 2022 (Unaudited)

The following table summarizes our results of operations (in thousands):

Three Months Ended June 30,

Three Months Ended September 30,

Operating expenses:

4 unchanged sentences

Research and Development

Research and development expenses for the three months ended June 30, 2023 were $14.4 million, compared to $8.1 million for the three months ended June 30, 2022.

This increase of $6.3 million was primarily due to an increase of $4.7 million related to clinical and contract manufacturing costs to support the marketing registration for mavodelpar, an increase of $1.0 million in personal-related costs due to additional headcount, and an increase of $0.6 million in medical affairs costs.

Research and development expenses for the three months ended September 30, 2023 were $13.6 million, compared to $9.9 million for the three months ended September 30, 2022.

This increase of $3.7 million was primarily due to an increase of $2.2 million related to clinical development and contract manufacturing costs to support the marketing registration for mavodelpar, an increase of $1.0 million in medical affairs costs, and an increase of $0.9 million in personnel-related costs due to additional headcount offset by a decrease of $0.5 million of other research and development activities.

General and Administrative

General and administrative expenses for the three months ended June 30, 2023 were $6.6 million, compared to $4.3 million for the three months ended June 30, 2022.

This increase of $2.3 million was primarily due to an

increase of $1.2 million in commercial development activities and an increase of $1.0 million in facility and personnel-related costs due to additional headcount.

The increase in other income for the three months ended June 30, 2023, compared to the same period in the prior year was due to a higher interest rate earned on our short-term investments and an increase in short-term investment balance.

Comparison of Six Months Ended June 30, 2023 and 2022 (Unaudited)

General and administrative expenses for the three months ended September 30, 2023 were $7.3 million, compared to $3.9 million for the three months ended September 30, 2022.

This increase of $3.4 million was primarily due to an increase of $2.1 million in commercial development activities and an increase of $1.2 million in facility and personnel-related costs due to additional headcount.

The increase in other income for the three months ended September 30, 2023, compared to the same period in the prior year was due to a higher interest rate earned on our short-term investments and an increase in short-term investment balance.

Comparison of Nine Months Ended September 30, 2023 and 2022 (Unaudited)

The following table summarizes our results of operations (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Operating expenses:

4 unchanged sentences

Research and Development

Research and development expenses for the six months ended June 30, 2023 were $25.4 million, compared to $17.4 million for the six months ended June 30, 2022.

This increase of $8.0 million was primarily due to an increase of $5.0 million related to clinical and contract manufacturing costs to support the marketing registration for mavodelpar, an increase of $1.7 million in personal-related costs due to additional headcount, and an increase of $0.9 million in medical affairs costs.

Research and development expenses for the nine months ended September 30, 2023 were $39.0 million, compared to $27.3 million for the nine months ended September 30, 2022.

This increase of $11.7 million was primarily due to an increase of $7.6 million related to clinical development and contract manufacturing costs to support the marketing registration for mavodelpar, an increase of $2.7 million in personal-related costs due to additional headcount, and an increase of $1.8 million in medical affairs costs offset by a decrease of $0.4 million of other research and development activities.

General and Administrative

General and administrative expenses for the six months ended June 30, 2023 were $11.8 million, compared to $8.0 million for the six months ended June 30, 2022.

This increase of $3.7 million was primarily due to an increase of $2.0 million in facility and personnel-related costs due to additional headcount and an increase of $1.5 million in commercial development activities.

The increase in other income for the six months ended June 30, 2023, compared to the same period in the prior year was due to a higher interest rate earned on our short-term investments and an increase in short-term investment balance.

General and administrative expenses for the nine months ended September 30, 2023 were $19.0 million, compared to $11.9 million for the nine months ended September 30, 2022.

This increase of $7.1 million was primarily due to an increase of $3.7 million in commercial development activities and an increase of $3.2 million in facility and personnel-related costs due to additional headcount.

The increase in other income for the nine months ended September 30, 2023, compared to the same period in the prior year was due to a higher interest rate earned on our short-term investments and an increase in short-term investment balance.

Liquidity and Capital Resources

1 unchanged sentence

We have not generated any revenue from the sale of any products.

As of June 30, 2023, we had available cash, cash equivalents and short-term investments of approximately $142.7 million.

In May 2022, we entered into an at-the-market equity offering sales agreement with SVB Securities LLC (ATM facility) under which we may offer and sell, from time to time, at our sole discretion, up to $20.0 million in shares of our common stock.

As of June 30, 2023, we have sold and issued approximately 500,000 shares of our common stock pursuant to the ATM facility at a weighted-average price of $2.48 per share, resulting in aggregate gross proceeds to us of $1.2 million.

Sales commissions to SVB Securities LLC and other issuance expenses were immaterial.

The remaining capacity under the ATM facility was approximately $18.8 million in shares of common stock as of June 30, 2023.

As of September 30, 2023, we had available cash, cash equivalents and short-term investments of approximately $125.6 million.

In May 2022, we entered into an at-the-market equity offering sales agreement (2022 ATM Facility) with Leerink Partners LLC (previously SVB Securities LLC) (Leerink) under which we could offer and sell, from time to time, at our sole discretion, up to $20.0 million in shares of our common stock.

As of September 30, 2023, we had sold and issued approximately 500,000 shares of our common stock pursuant to the 2022 ATM Facility at a weighted-average price of $2.48 per share, resulting in aggregate gross proceeds to us of $1.2 million.

Sales commissions to Leerink and other issuance expenses were immaterial.

The remaining capacity under the 2022 ATM Facility was approximately $18.8 million in shares of common stock as of September 30, 2023.

In November 2023, we terminated the 2022 ATM Facility.

In May 2023, we completed a public offering in which we sold an aggregate of 7,906,250 shares of common stock which included the full exercise of the underwriters’

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Total net proceeds from the Private Placement, after deducting advisor fees and other estimated fees and expenses, were approximately $4.7 million.

On October 30, 2023, pursuant to a Common Stock Repurchase Agreement with vTv Therapeutics, we repurchased 576,443 shares of our common stock from vTv Therapeutics at price of $7.64 per share for an aggregate purchase price of approximately $4.4 million.

The repurchase was made directly in a private, non-underwritten transaction.

Subsequently, we retired the repurchased shares.

In November 2023, we entered into an at-the-market equity offering sales agreement (2023 ATM Facility) with Leerink under which we may offer and sell, from time to time, at our sole discretion, up to $100.0 million in shares of our common stock.

We have not yet sold any shares of our common stock under the 2023 ATM Facility.

Operating Capital Requirements

From our inception in 2014, we have incurred significant losses and negative cash flows from operations.

For the three and six months ended June 30, 2023, we had a net loss of $19.5 million and $34.6 million, respectively, and used $25.2 million cash in operating activities during the six months ended June 30, 2023.

Since inception through June 30, 2023, we have an accumulated deficit of $171.3 million.

For the three and nine months ended September 30, 2023, we had a net loss of $19.2 million and $53.8 million, respectively, and used $43.9 million of cash in operating activities during the nine months ended September 30, 2023.

As of September 30, 2023, we have an accumulated deficit of $190.5 million.

We have incurred operating losses since inception and we expect to continue to incur substantial expenses related to our development activities for the foreseeable future as we continue product development for mavodelpar.

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under Part II, Item 1A below.

As of June 30, 2023, we have cash, cash equivalents and short-term investments of $142.7 million, which we expect will be sufficient to fund operations beyond the potential submission of a new drug application for mavodelpar for treatment of PMM in the United States anticipated in first half of 2024.

However, based on the anticipated increase in sales and marketing expenses for mavodelpar, management has concluded that substantial doubt exists about our ability to continue as a going concern for more than one year from the date of the filing of this Quarterly Report on Form 10-Q.

As of September 30, 2023, we have cash, cash equivalents and short-term investments of $125.6 million, which we expect will be sufficient to fund operations through the potential submission of a new drug application for mavodelpar for the treatment of PMM in the United States anticipated in first half of 2024, however, based on

the anticipated increase in commercial development expenses for mavodelpar, not for more than one year from the date of the filing of this Quarterly Report on Form 10-Q.

Accordingly, management has concluded that substantial doubt exists about our ability to continue as a going concern .

In addition, we have the ability to defer certain commercial activities until additional capital is received.

In addition, we have the ability to defer certain commercial development activities until additional capital is received.

There can be no assurance that we will be successful in obtaining additional funding, that our projections of our future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.

If we are not able to secure adequate additional funding, we may be forced to make

reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs.

If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs.

Any of these actions could negatively impact our business, results of operations, and future prospects.

Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions, disruptions to, and volatility in, financial markets in the United States and worldwide, including those resulting from infectious diseases, bank failures, actual or perceived changes in interest rates and economic inflation.

Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions, disruptions to, and volatility in, financial markets in the United States and worldwide, including those resulting from armed conflicts, infectious diseases, bank failures, actual or perceived changes in interest rates and economic inflation.

We may not be able to secure additional financing in a timely manner or on favorable terms, if at all.

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The following table summarizes our cash flows (unaudited and in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash used in operating activities

Net cash (used in) provided by investing activities

Net cash used in by investing activities

Net cash provided by financing activities

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Operating Activities

Net cash used in operating activities for the six months ended June 30, 2023 was $25.2 million, consisting primarily of our net loss of $34.6 million adjusted for non-cash items of $1.5 million primarily due to $2.4 million of stock-based compensation expense and $0.8 million in fair value of a performance award, offset by $2.0 million of amortization/accretion on short term investments and a $7.9 million net change in operating assets and liabilities.

Net cash used in operating activities for the nine months ended September 30, 2023 was $43.9 million, consisting primarily of our net loss of $53.8 million adjusted for non-cash items of $1.8 million primarily due to $3.8 million of stock-based compensation expense and $1.0 million in fair value of a performance award, offset by $3.6 million of amortization/accretion on short term investments and a $8.1 million net change in operating assets and liabilities.

The change in our net operating assets and liabilities was primarily due to a decrease in prepaid and other current assets of $2.1 million and an increase in accounts payable and accrued expenses of $6.4 million due to timing of receipt of invoices and payments.

Net cash used in operating activities for the six months ended June 30, 2022 was $21.0 million, consisting primarily of our net loss of $25.3 million adjusted for non-cash items of $2.0 million primarily due to stock-based compensation expense and a $2.4 million net change in operating assets and liabilities.

The change in our net operating assets and liabilities was primarily due to an increase in accrued expenses of $1.7 million due to timing of receipt of invoices and payments and a decrease in prepaid and other current assets of $0.9 million.

Net cash used in operating activities for the nine months ended September 30, 2022 was $31.7 million, consisting primarily of our net loss of $38.4 million adjusted for non-cash items of $3.0 million primarily due to stock-based compensation expense and a $3.6 million net change in operating assets and liabilities.

The change in our net operating assets and liabilities was primarily due to an increase in accounts payable and accrued expenses of $2.8 million due to timing of receipt of invoices and payments and a decrease in prepaid and other current assets of $1.1 million.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2023 was $50.5 million consisting primarily of the net purchase of available-for-sale short-term investments.

Net cash provided by investing activities for the six months ended June 30, 2022 was $14.5 million, consisting primarily of the net sales of available-for-sale short-term investments.

Net cash used in investing activities for the nine months ended September 30, 2023 was $29.3 million, consisting primarily of the net purchase of available-for-sale short-term investments.

Net cash used in investing activities for the nine months ended September 30, 2022 was $30.9 million, consisting primarily of the net purchase of available-for-sale short-term investments.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2023 was $64.8 million consisting primarily of the net proceeds of $58.9 million, $4.7 million, and $1.0 million from the sale of common stock in our May 2023 public offering, the Private Placement, and the ATM facility, respectively.

Net cash provided by financing activities for the six months ended June 30, 2022 was immaterial.

Net cash provided by financing activities for the nine months ended September 30, 2023 was $65.0 million, consisting primarily of the net proceeds of $58.9 million, $4.7 million, and $1.0 million from the sale of common stock in our May 2023 public offering, the Private Placement, and the 2022 ATM Facility, respectively.

Net cash provided by financing activities for the nine months ended September 30, 2022 was immaterial.

Material Cash Requirements

The discussion below summarizes our significant contractual obligations and commitments as of June 30, 2023.

The discussion below summarizes our significant contractual obligations and commitments as of September 30, 2023.

See Note 7 of Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding our leases, including the future operating lease minimum payments.

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in our Annual Report on Form 10-K for the year ended December 31, 2022, and the notes to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

During the six months ended June 30, 2023, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2022.

During the nine months ended September 30, 2023, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Recent Accounting Pronouncements

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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