What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-02 compared with 2021-08-04 · 31 added, 26 removed, 205 unchanged (22% of the section changed)

12 unchanged sentences

We believe that when implemented correctly precision medicine can enhance therapeutic response, improve patient outcomes, and reduce healthcare costs.

Our lead product candidates are rNAPc2 (AB201) as a potential treatment for diseases caused by ribonucleic acid, or RNA, viruses, initially focusing on COVID-19, the disease syndrome caused by the SARS-CoV-2 virus, and Gencaro™ (bucindolol hydrochloride) for the treatment of atrial fibrillation, or AF, in patients with chronic heart failure, or HF.

Our lead product candidates are rNAPc2 (AB201) as a potential treatment for COVID-19, the disease syndrome caused by the SARS-CoV-2 virus, and potentially other viral diseases and Gencaro™ (bucindolol hydrochloride) for the treatment of atrial fibrillation, or AF, in patients with chronic heart failure, or HF.

rNAPc2 targets COVID-19 patients with biomarker evidence of coagulopathy, while Gencaro is being developed for patients who have a genotype that identifies a drug target associated with heightened efficacy.

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The disease caused by the SARS-CoV-2 virus has been designated COVID-19.

According to the World Health Organization, since this outbreak was first reported in late 2019, there have been over 190 million confirmed cases of COVID-19 and over 4 million deaths worldwide attributed to the virus (as of July 2021).

According to the World Health Organization, since this outbreak was first reported in late 2019, there have been over 240 million confirmed cases of COVID-19 and over 4 million deaths worldwide attributed to the virus (as of October 2021).

COVID-19 is associated with a high incidence of both arterial and venous coagulation-related adverse events in large and small blood vessels.

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We initiated the Phase 2b clinical trial of rNAPc2 (AB201), ASPEN-COVID-19, in patients hospitalized with COVID-19 in the fourth quarter of 2020.

In July 2021, ASPEN-COVID-19 clinical trial target enrollment increased from 100 to 160 patients in order to maximize the sample size for determining if there are differences in the two rNAPc2 dose regimens being investigated, to minimize variance in the standard of care heparin control arm, in recognition of the study being conducted in different geographic regions and to potentially account for evolving changes in the clinical course of COVID-19.

We anticipate announcing topline data from this approximately 160 patient international Phase 2b clinical trial in the fourth quarter of 2021.

In July 2021, we increased the ASPEN-COVID-19 clinical trial target enrollment from 100 to 160 patients in an effort to increase the sample size for determining if there are differences in the two rNAPc2 dose regimens being investigated, to decrease variance in the standard of care heparin control arm, in recognition of the study being conducted in different geographic regions and to potentially account for evolving changes in the clinical course of COVID-19.

In October 2021, the Data and Safety Monitoring Committee, or DSMC, completed a pre-specified interim analysis and, based on the DSMC’s review of approximately 75% of the projected final efficacy and safety data, recommended completion of the

clinical trial with no modifications to the clinical trial design.

We anticipate announcing topline data from this approximately 1 6 0 patient international Phase 2b clinical trial in the first quarter of 202 2 .

We are evaluating rNAPc2 as a treatment for patients hospitalized with COVID-19 who are at high risk for thrombotic complications, as indicated by elevated D-dimer levels.

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This analysis showed novel results for Gencaro in patients in the clinical trial with EF’s of 40% and higher.

The Phase 3 pivotal clinical trial of Gencaro conducted under an SPA will include secondary endpoints that are intended to capture some of this new information, such as a reduction in the need to deploy rhythm control interventions including electrical cardioversion, catheter ablation and use of anti-arrhythmic drugs and avoidance of drug-related complications such as bradycardia.

complications such as bradycardia.

Based on these analyses, we were issued a United States patent in February 2021 for the use of Gencaro in this patient population.

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If we are unable to obtain sufficient financing or are unable to complete a strategic transaction, we may discontinue our development activities on rNAPc2 or Gencaro or discontinue our operations .

We believe our cash and cash equivalents as of June 30, 2021 will be sufficient to fund our operations through the end of fiscal year 2022, including the projected costs for the rNAPc2 ( AB201) Phase 2b clinical trial.

We believe our cash and cash equivalents as of September 30, 2021 will be sufficient to fund our operations through the end of fiscal year 2022, including the projected costs for the rNAPc2 ( AB201) Phase 2b clinical trial.

Conducting a Phase 3 rNAPc2 clinical trial or the Phase 3 PRECISION-AF trial would likely require additional financing.

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Our R&D expense is almost entirely generated by our activities relating to the development of rNAPc2 (AB201).

R&D expense for the three months ended June 30, 2021 was $3.6 million compared to $0.4 million for the corresponding period of 2020, an increase of $3.2 million.

R&D expense for the six months ended June 30, 2021 was $6.5 million compared to $0.7 million for the corresponding period of 2020, an increase of approximately $5.7 million.

Clinical expense increased approximately $1.7 million and $3.3 million for the three and six months ended June 30, 2021, as compared to the corresponding periods of 2020.

Manufacturing process development costs increased approximately $1.2 million and $1.7 million for the three and six months ended June 30, 2021, as compared to the corresponding periods of 2020.

R&D expense for the three months ended September 30, 2021 was $3.4 million compared to $1.1 million for the corresponding period of 2020, an increase of $2.4 million.

R&D expense for the nine months ended September 30, 2021 was $9.9 million compared to $1.8 million for the corresponding period of 2020, an increase of approximately $8.1 million.

Clinical expense increased approximately $1.7 million and $5.0 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods of 2020.

Manufacturing process development costs increased approximately $0.3 million and $2.0 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods of 2020.

The increase was related to the initiation of our rNAPc2 (AB201) clinical trial in the second half of 2020.

The remaining increase is primarily a result of higher outside services and consulting costs.

R&D personnel costs increased approximately $0.3 million and $0.5 million for the three and six months ended June 30, 2021, as compared to the corresponding periods of 2020.

R&D personnel costs increased approximately $0.3 million and $0.7 million for the three and nine months ended September 30, 2021, as compared to the corresponding periods of 2020.

R&D expense in 2021 is expected to be higher than 2020, as we continue our rNAPc2 (AB201) international Phase 2b clinical trial.

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General and administrative, or G&A, expenses primarily consist of personnel costs, consulting and professional fees, insurance, facilities and depreciation expenses, and various other administrative costs.

G&A expenses were $1.3 million for the three months ended June 30, 2021 compared to $0.9 million for the corresponding period of 2020, an increase of $0.3 million.

G&A expenses were $2.5 million for the six months ended June 30, 2021 compared to $1.9 million for the corresponding period of 2020, an increase of $0.6 million The increases were primarily a result of higher personnel costs in 2021.

G&A expenses in the second half of 2021 are expected to be consistent with the first half of 2021 as we maintain administrative activities to support our ongoing operations.

G&A expenses were $1.3 million for the three months ended September 30, 2021 compared to $0.9 million for the corresponding period of 2020, an increase of $0.3 million.

G&A expenses were $3.8 million for the nine months ended September 30, 2021 compared to $2.9 million for the corresponding period of 2020, an increase of $0.9 million The increases were primarily a result of higher personnel and insurance costs in 2021.

G&A expenses in the last quarter of 2021 are expected to be consistent with the third quarter of 2021 as we maintain administrative activities to support our ongoing operations.

Interest and Other Income

Interest and other income was $3,000 and $2,000 in the three months ended June 30, 2021 and 2020, respectively.

Interest and other income was $5,000 and $26,000 in the three months ended June 30, 2021 and 2020, respectively.

Interest and other income was $4,000 and $1,000 in the three months ended September 30, 2021 and 2020, respectively.

Interest and other income was $9,000 and $27,000 in the three months ended September 30, 2021 and 2020, respectively.

Interest income for the remainder of 2021 is expected to be negligible.

Interest Expense

Interest expense was $3,000 and $7,000 for the three and six months ended June 30, 2020.

Interest expense was $2,000 and $9,000 for the three and nine months ended September 30, 2020.

Based on our current capital structure, interest expense for the remainder of 2021 is expected to be negligible.

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Cash and Cash Equivalents

September 30,

(in thousands)

Cash and cash equivalents

As of June 30, 2021, we had total cash and cash equivalents of $63.2 million, as compared to $49.1 million as of December 31, 2020.

The net increase of $14.1 million primarily reflects the net proceeds of $23.1 million from the issuance of common stock, offset by $8.9 million of cash used in operating activities during the six months ended June 30, 2021.

As of September 30, 2021, we had total cash and cash equivalents of $58.3 million, as compared to $49.1 million as of December 31, 2020.

The net increase of $9.2 million primarily reflects the net proceeds of $23.1 million from the issuance of common stock, offset by $13.8 million of cash used in operating activities during the nine months ended September 30, 2021.

Cash Flows from Operating, Investing and Financing Activities

Six Months Ended June 30,

Nine Months Ended

September 30,

(in thousands)

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Net increase in cash and cash equivalents

Net cash used in operating activities for the six months ended June 30, 2021 increased $6.2 million compared with the same period in 2020.

Net cash used in operating activities for the nine months ended September 30, 2021 increased $9.1 million compared with the same period in 2020.

This was primarily due to higher outflows related to changes in operating assets and liabilities and a higher net loss in 2021, as discussed in Results of Operations above.

Net cash used in investing activities for the six months ended June 30, 2021 was $22,000 for the purchase of property and equipment.

Net cash used in investing activities for the six months ended June 30, 2020 was $6,000 for the purchase of property and equipment.

Net cash provided by financing activities was $23.1 million for the six months ended June 30, 2021 related to net proceeds from sales of our common stock in our “at the market” equity offering in the period.

Net cash provided by financing activities was $5.4 million for the six months ended June 30, 2020 representing $5.5 million in net proceeds from sales of our common stock in our registered direct equity offering in the period, less $0.1 million of payments on a vendor finance arrangement.

Net cash used in investing activities for the nine months ended September 30, 2021 was $36,000 for the purchase of property and equipment.

Net cash used in investing activities for the nine months ended September 30, 2020 was $6,000 for the purchase of property and equipment.

Net cash provided by financing activities was $23.1 million for the nine months ended September 30, 2021 related to net proceeds from sales of our common stock in our “at the market” equity offering in the period.

Net cash provided by financing activities was $47.5 million for the nine months ended September 30, 2020 representing $47.7 million in net proceeds from sales of our common stock in our registered direct equity offering and our “at the market” equity offering in the period, less $0.3 million of payments on a vendor finance arrangement.

Sources and Uses of Capital

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the terms and conditions of our existing collaborative and licensing agreements.

We believe our cash and cash equivalents balance as of June 30, 2021 will be sufficient to fund our operations through the end of fiscal year 2022.

We believe our cash and cash equivalents balance as of September 30, 2021 will be sufficient to fund our operations through the end of fiscal year 2022.

Conducting a Phase 3 rNAPc2 clinical trial or the Phase 3 PRECISION-AF trial would likely require additional financing .

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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 2. Management’s Discussion and Analysis