What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 81 added, 59 removed, 351 unchanged (29% of the section changed)

26 unchanged sentences

Preferred stock, par value $ 0.01 per share, 20,000,000 shares authorized;

none issued and outstanding at March 31, 2022 and December 31, 2021.

Common stock, par value $ 0.01 per share, 150,000,000 shares authorized at March 31, 2022 and December 31, 2021;

62,730,015 and 62,628,855 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively.

none issued and outstanding at June 30, 2022 and December 31, 2021.

Common stock, par value $ 0.01 per share, 150,000,000 shares authorized at June 30, 2022 and December 31, 2021;

62,730,015 and 62,628,855 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively.

Additional paid-in capital

7 unchanged sentences

Three Months Ended

Six Months Ended

Costs and expenses:

20 unchanged sentences

Balance at March 31, 2021

Exercise of stock options

Stock-based compensation expense

Balance June 30, 2021

Balance at January 1, 2022

Exercise of stock options and warrants

Exercise of stock options

Stock-based compensation expense

Balance at March 31, 2022

Stock-based compensation expense

Balance June 30, 2022

See accompanying Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

24 unchanged sentences

Cash paid for interest

Property acquired under finance lease

See accompanying Notes to Condensed Consolidated Financial Statements

8 unchanged sentences

In the CRL, FDA expressed difficulty in estimating the treatment effect of narsoplimab in HSCT-TMA and asserted that additional information will be needed to support regulatory approval.

In February 2022, we had a Type A end-of-review meeting with FDA to discuss the CRL, including each of the review issues that FDA identified as presenting difficulties interpreting the treatment response in the pivotal trial.

Although we feel that we adequately addressed all of the issues noted in the CRL, the meeting minutes included a number of the review division’s critiques that we believe had already been addressed and/or were inaccurate.

As a result, we currently plan to submit a Formal Dispute Resolution Request.

Formal dispute resolution is an official pathway that enables a sponsor to appeal a decision by an FDA review division to a higher authority within FDA, in this case the Office of New Drugs.

Our request is for regular approval based on the data in our existing BLA.

In February 2022, we had a Type A post-action meeting with FDA to discuss the CRL.

Although we felt that we adequately addressed all of the issues noted in the CRL, the meeting minutes included a number of the review division’s critiques that we believe had already been addressed and/or were inaccurate.

As a result, in June 2022, we submitted a Formal Dispute Resolution Request.

Formal Dispute Resolution is an official pathway that enables a sponsor to appeal a decision by an FDA review division to a higher authority within FDA, in this case the Office of New Drugs (“OND”).

We continue to believe that our BLA, as submitted, merits approval and that the data meet or exceed the threshold for substantial evidence of effectiveness;

however, there can be no assurances that the Formal Dispute Resolution process will result in approval of our BLA, will provide a clear path to resubmission of our BLA, or that any identified path to BLA resubmission will be satisafactory in terms of the information, time and/or expenditure required.

however, there can be no assurances that the Formal Dispute Resolution process will provide a clear path to resubmission of our BLA, that resubmission will result in approval of our BLA, or that any identified path to BLA resubmission will be satisfactory in terms of the information, time and/or expenditure required.

We are currently awaiting a decision from OND on the dispute.

Unless the deciding official asks us for more information or notifies us that more time is needed to complete the review, we expect a decision on the dispute to be rendered in August 2022.

We also have multiple late-stage clinical development programs in our pipeline, which are focused on:

9 unchanged sentences

All inter-company transactions have been eliminated.

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles

The accompanying condensed

consolidated financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

Certain prior year amounts in the condensed consolidated balance sheets, statements of operations, statements of stockholders’ equity (deficit) and statements of cash flows and the notes to the condensed consolidated financial statements have been reclassified in the condensed consolidated financial statements to conform to the current year presentation.

Risks and Uncertainties

As of March 31, 2022, we had cash, cash equivalents and short-term investments of $ 142.2 million and outstanding accounts receivable of $ 16.3 million.

Our loss for the quarter ended March 31, 2022 was $ 33.0 million and included $ 4.2 million of noncash operating expenses.

As of June 30, 2022, we had cash, cash equivalents and short-term investments of $ 122.6 million and outstanding accounts receivable of $ 14.5 million.

Our loss for the second quarter ended June 30, 2022 was $ 30.9 million and included $ 3.7 million of noncash operating expenses.

Our loss for the six months ended June 30, 2022 was $ 63.9 million and included $ 7.9 million of noncash operating expenses.

We plan to continue to fund our operations for the next twelve months with our existing cash and investments, our current accounts receivable, and OMIDRIA royalties.

3 unchanged sentences

Should it be determined to be strategically advantageous, we could pursue debt financings as well as public and private offerings of our equity securities, similar to those we have previously completed, or other strategic transactions, which may include licensing a portion of our existing technology.

Management believes the assets on hand along with expected royalties received are adequate to finance our operations at least through May 10, 2023.

Management believes the assets on hand along with expected royalties to be received are adequate to finance our operations at least through August 9, 2023.

Accordingly, the accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

13 unchanged sentences

general corporate overhead is not allocated to discontinued operations.

The OMIDRIA asset sale to Rayner qualifies as a discontinued operation.

asset sale to Rayner qualifies as a discontinued operation.

The Company included information regarding cash flows from discontinued operations (see “Note 3 – Discontinued Operations”).

52 unchanged sentences

for a continuous period of at least four years .

During the three months ended March 31, 2022, we earned royalties of $ 13.8 million on sales of OMIDRIA which we recorded as a reduction to the OMIDRIA contract royalty asset.

During the three and six months ended June 30, 2022, we earned royalties of $ 17.2 million and $ 31.1 million on sales of OMIDRIA which we recorded as a reduction from the OMIDRIA contract royalty asset.

We also recorded $ 17.1 million of income in discontinued operations representing interest income and remeasurement adjustments to the OMIDRIA contract royalty asset.

3 unchanged sentences

Royalty interest income and remeasurement adjustments

OMIDRIA contract royalty asset at March 31, 2022

OMIDRIA contract royalty asset at June 30, 2022

Net income from discontinued operations is as follows:

Three Months Ended

Six Months Ended

(In thousands)

1 unchanged sentence

Royalty interest income and remeasurement adjustments

Costs and expenses

Other (income), costs and expenses, net

Net income from discontinued operations

Cash flow from discontinued operations is as follows:

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands)

5 unchanged sentences

Potentially dilutive securities excluded from Diluted EPS are as follows:

Three Months Ended

Six Months Ended

2023 Notes convertible to common stock (1)

27 unchanged sentences

Total property and equipment, net

For the three months ended March 31, 2022 and 2021, depreciation and amortization expense was $ 0.3 million and $ 0.4 million, respectively.

For the three months ended June 30, 2022 and 2021, depreciation and amortization expense was $ 0.2 million and $ 0.4 million, respectively.

For the six months ended June 30, 2022 and 2021, depreciation and amortization expense was $ 0.5 million and $ 0.7 million, respectively.

Accrued Expenses

1 unchanged sentence

(In thousands)

Consulting and professional fees

Contract research and development

Employee compensation

Interest payable

Clinical trials

Employee compensation

Consulting and professional fees

Contract research and development

Sales rebates, fees and discounts

2 unchanged sentences

Note 6—Fair-Value Measurements

As of March 31, 2022, and December 31, 2021, all investments were classified as short-term and available-for-sale on the accompanying condensed consolidated balance sheets.

As of June 30, 2022, and December 31, 2021, all investments were classified as short-term and available-for-sale on the accompanying condensed consolidated balance sheets.

Investment income, which was included as a component of other income, consists of interest earned.

7 unchanged sentences

Our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis are as follows:

March 31, 2022

June 30, 2022

(In thousands)

5 unchanged sentences

Money-market funds classified as non-current restricted investments

Cash held in demand deposit accounts of $ 9.0 million and $ 100.8 million is excluded from our fair-value hierarchy disclosure as of March 31, 2022 and December 31, 2021, respectively.

There were no unrealized gains or losses associated with our investments as of March 31, 2022 or December 31, 2021.

Cash held in demand deposit accounts of $ 14.1 million and $ 100.8 million is excluded from our fair-value hierarchy disclosure as of June 30, 2022 and December 31, 2021, respectively.

There were no unrealized gains or losses associated with our investments as of June 30, 2022 or December 31, 2021.

The carrying amounts reported in the accompanying condensed consolidated balance sheets for receivables, accounts payable, other current monetary assets and liabilities approximate fair value.

1 unchanged sentence

Note 7—Line of Credit

We have a Loan and Security Agreement with Silicon Valley Bank (“SVB”), which provides for a $ 50.0 million revolving line of credit facility (the “Line of Credit Agreement”) based on 85 % of our eligible royalty and trade receivables, net.

The Line of Credit Agreement is secured by all our assets excluding intellectual property and development program inventories and matures in August 2022.

As of March 31, 2022 and December 31, 2021, no amounts were outstanding under the Line of Credit Agreement.

As of June 30, 2022, we had a Loan and Security Agreement with Silicon Valley Bank (“SVB”) providing for a $ 50.0 million revolving line of credit facility (the “Line of Credit Agreement”).

As of June 30, 2022, we had no outstanding borrowings under the Line of Credit Agreement.

The Line of Credit Agreement expired on August 2, 2022.

Note 8—Unsecured Convertible Senior Notes

In November 2018, we issued $ 210.0 million in aggregate principal amount of our 6.25 % Convertible Senior Notes (the “2023 Notes ”) , and in August and September 2020, we issued $ 225.0 million in aggregate principal amount

of our 5.25 % Convertible Senior Notes (the “2026 Notes”).

We used a portion of the proceeds from the 2026 Notes to repurchase $ 115.0 million principal amount of the 2023 Notes and terminate a corresponding portion of the related capped call for the 2023 Notes, as described below.

Unsecured convertible senior notes outstanding at March 31, 2022 and December 31, 2021 are as follows:

Balance as of March 31, 2022

Unsecured convertible senior notes outstanding at June 30, 2022 and December 31, 2021 are as follows:

Balance as of June 30, 2022

(In thousands)

11 unchanged sentences

2023 Unsecured Convertible Senior Notes

Our 2023 Notes accrue interest at an annual rate of 6.25 % per annum, payable semi-annually in arrears on May 15 and November 15 of each year.

Our 2023 Notes are unsecured and accrue interest at an annual rate of 6.25 % per annum, payable semi-annually in arrears on May 15 and November 15 of each year.

The 2023 Notes mature on November 15, 2023 unless earlier purchased, redeemed or converted in accordance with their terms.

As of March 31, 2022, the unamortized debt issuance costs of $ 1.1 million will be amortized to interest expense at an effective interest rate of 7.0 % over the remaining term.

As of June 30, 2022, the unamortized debt issuance costs of $ 1.0 million will be amortized to interest expense at an effective interest rate of 7.0 % over the remaining term.

The 2023 Notes are convertible into cash, shares of our common stock or a combination thereof, as we elect at our sole discretion.

The initial conversion rate is 52.0183 shares of our common stock per $ 1,000 of note principal (equivalent to an initial conversion price of approximately $ 19.22 per share of common stock), subject to adjustment in certain circumstances.

To reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2023 Notes, we entered into a capped call transaction (the “2023 Capped Call”), which covers the number of shares of our common stock underlying the 2023 Notes when our common stock share price is trading between the initial conversion price of $ 19.22 and $ 28.84 .

In connection with the partial repurchase of the 2023 Notes, we entered into a capped call termination contract to unwind a proportionate amount of the 2023 Capped Call.

As of March 31, 2022, approximately 4.9 million shares remained outstanding on the 2023 Capped Call.

As of June 30, 2022, approximately 4.9 million shares remained outstanding on the 2023 Capped Call.

The following table sets forth total interest expense recognized in connection with the 2023 Notes:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Contractual interest expense

1 unchanged sentence

2026 Unsecured Convertible Senior Notes

The 2026 Notes are unsecured and accrue interest at an annual rate of 5.25 % per annum, payable semi-annually in arrears on February 15 and August 15 of each year.

Our 2026 Notes are unsecured and accrue interest at an annual rate of 5.25 % per annum, payable semi-annually in arrears on February 15 and August 15 of each year.

The 2026 Notes mature on February 15, 2026, unless earlier purchased, redeemed or converted in accordance with their terms.

As of March 31, 2022, the unamortized debt issuance costs of $ 5.0 million will be amortized to interest expense at an effective interest rate of 5.9 % over the remaining term.

As of June 30, 2022, the unamortized debt issuance costs of $ 4.7 million will be amortized to interest expense at an effective interest rate of 5.9 % over the remaining term.

The 2026 Notes are convertible into cash, shares of our common stock or a combination thereof, as we elect at our sole discretion.

The initial conversion rate is 54.0906 shares of our common stock per $ 1,000 of note principal (equivalent to an initial conversion price of approximately $ 18.4875 per share of common stock), which equals approximately 12.2 million shares of common stock issuable upon conversion, subject to adjustment in certain circumstances.

3 unchanged sentences

The following table sets forth interest expense recognized related to the 2026 Notes:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Contractual interest expense

Amortization of debt issuance costs

Future minimum payments for the 2023 Notes and 2026 Notes as of March 31, 2022 are as follows:

Future minimum payments for the 2023 Notes and 2026 Notes as of June 30, 2022 are as follows:

(In thousands)

2 unchanged sentences

We have an operating lease for our office and laboratory facilities with an initial term that ends in 2027 with two options to extend the lease term by five years .

On January 14, 2022, we entered into an agreement with our landlord to

early terminate a portion of the rentable square footage of our office and laboratory facilities, which reduced the right of use asset by $ 4.7 million and related liability by $ 5.2 million.

On January 14, 2022, we entered into an agreement with our landlord to early terminate a portion of the rentable square footage of our office and laboratory facilities, which reduced the right of use asset by $ 4.7 million and related liability by $ 5.2 million.

We recorded a non-cash gain of $ 0.5 million to early terminate the lease.

2 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

Operating lease cost

4 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities is as follows:

Three Months Ended

Six Months Ended

(In thousands)

3 unchanged sentences

Note 10—Commitments and Contingencies

We have various agreements with third parties that collectively require payment of termination fees totaling $ 31.0 million as of March 31, 2022 if we cancel the work within specific time frames, either prior to commencing or during performance of the contracted services .

We have various agreements with third parties that collectively require payment of termination fees totaling $ 30.5 million as of June 30, 2022 if we cancel the work within specific time frames, either prior to commencing or during performance of the contracted services .

Development Milestones and Product Royalties

1 unchanged sentence

These licenses may require milestone payments during the clinical development processes or upon approval of commercial sale as well as low single- to low double-digit royalties on the net income or net sales of the product.

For the three months ended March 31, 2022 and March 31, 2021, development milestone expenses were insignificant.

For the three months and six months ended June 30, 2022 and June 30, 2021, development milestone expenses were insignificant.

Should narsoplimab be approved, we would owe milestone payments to development partners and be obligated to pay low single-digit royalties on net sales of the product.

2 unchanged sentences

On March 1, 2021, we entered into a sales agreement to sell shares of our common stock having an aggregate offering price of up to $ 150.0 million, from time to time, through an “at the market” equity offering program.

As of March 31, 2022, we have not sold any shares under this program.

As of June 30, 2022, we have not sold any shares under this program.

In March 2021, a cashless exercise was executed for 43,115 warrants, resulting in the issuance of 24,901 shares of our common stock.

As of March 31, 2022, 200,000 warrants remained outstanding with an exercise price of $ 23.00 per share.

As of June 30, 2022, 200,000 warrants remained outstanding with an exercise price of $ 23.00 per share.

The warrants expire on April 12, 2023.

1 unchanged sentence

Our stock option plans provide for the grant of incentive and non-qualified stock options, restricted stock awards, RSUs, warrants and other stock awards to employees, non-employee directors and consultants.

Stock-based compensation expense is as follows:

Stock-based compensation is as follows:

Three Months Ended

Six Months Ended

(In thousands)

8 unchanged sentences

Three Months Ended

March 31, 2022

Six Months Ended

June 30, 2022

Estimated weighted-average fair value

8 unchanged sentences

Balance at December 31, 2021

Balance at March 31, 2022

Vested and expected to vest at March 31, 2022

Exercisable at March 31, 2022

As of March 31, 2022, there were 2.8 million unvested options outstanding that will vest over a weighted-average period of 2.4 years.

Balance at June 30, 2022

Vested and expected to vest at June 30, 2022

Exercisable at June 30, 2022

As of June 30, 2022, there were 2.5 million unvested options outstanding that will vest over a weighted-average period of 2.2 years.

The total estimated compensation expense yet to be recognized on outstanding options is $ 20.0 million.

The Company has 222,000 shares of unvested RSUs outstanding as of March 31, 2022 that vest 50 % on December 1, 2022 and 50 % on December 1, 2023.

The Company has 204,500 shares of unvested RSUs outstanding as of June 30, 2022 that vest 50 % on December 1, 2022 and 50 % on December 1, 2023.

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