What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-04 compared with 2021-08-05 · 92 added, 88 removed, 205 unchanged (47% of the section changed)

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Early onset infantile GM1 is characterized by onset in the first 6 months of life, while late onset infantile GM1 is characterized by onset between 6 and 24 months.

We believe PBGM01 could provide patients with significantly improved outcomes.

We believe PBGM01 may provide patients with significantly improved outcomes.

In NHP studies, we have observed meaningful transduction of both the CNS and peripheral organs critical for GM1 patients.

We are conducting clinical trials using an intra cisterna magna, or ICM, method of administration in combination with our next-generation AAVhu68 capsid, which involves an injection at the craniocervical junction.

We are conducting clinical trials using an intra cisterna magna, or ICM, method of administration, which involves an injection at the craniocervical junction.

In December 2020, the U.S.

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The European Commission has granted Orphan designation for PBGM01.

We have manufactured the PBGM01 clinical supply and have established a clinical supply chain to support the global clinical trial, including in the United States, the UK and Canada.

We have manufactured the PBGM01 clinical supply and have established a clinical supply chain to support the global clinical trial, including in the United States, the United Kingdom, and Canada.

PBFT02 for the Treatment of FTD-GRN

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In April 2021, we received a CTA for our upliFT-D Trial for PBFT02 from Health Canada.

We expect to initiate our upliFT-D Trial in the third quarter of 2021, and expect to report initial safety and 30-day biomarker data from the initial cohort in the first half of 2022.

We expect to initiate our upliFT-D Trial in the fourth quarter of 2021, and expect to report initial safety and 30-day biomarker data from the initial cohort in the first half of 2022.

The FDA has granted ODD and Fast Track Designation to PBFT02 for the treatment of FTD-GRN.

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In April 2021, we received CTA approvals from both UK MHRA and Health Canada for our GALax-C Trial.

We expect to initiate our GALax-C Trial in the third quarter of 2021, and expect to report initial safety and 30-day biomarker data from the initial cohort in the first half of 2022.

We expect to initiate our GALax-C Trial in the fourth quarter of 2021, and expect to report initial safety and 30-day biomarker data from the initial cohort in the first half of 2022.

The FDA has granted ODD, RPDD, and Fast Track Designation to PKBR03, and in April 2021, the European Commission granted Orphan designation for PBKR03.

We have manufactured PBKR03 clinical supply to support trial initiation in the United States.

We have manufactured PBKR03 clinical supply to support trial initiation in the United States and the United Kingdom.

Research Programs

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PBML04 is targeting patients with MLD who have mutations in the ARSA gene, PBAL05 is targeting patients with ALS who have a gain-of-function mutation in the C9orf72 gene, PBCM06 is targeting patients with CMT2A who have a mutation in the MFN2 gene and an undisclosed program to treat an adult CNS indication.

In addition, pursuant to the recent Second Expansion Amendment, we also have established exploratory research programs with Penn in Alzheimer’s Disease and Temporal Lobe Epilepsy.

In addition, pursuant to the recent Amendment (as defined below), we also have established exploratory research programs with Penn in Alzheimer’s Disease and Temporal Lobe Epilepsy.

Beyond this portfolio, through our research collaboration with GTP, we also have the option to license programs for ten additional new indications in CNS along with rights and licenses to new gene therapy technologies developed by Penn, such as novel capsids, toxicity reduction, delivery and formulation technologies.

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Historically, we have funded our operations through the sale of convertible preferred stock and public offerings of common stock.

Our net loss was $48.4 and $87.3 million for the three and six months ended June 30, 2021, respectively.

As of June 30, 2021, we had an accumulated deficit of $258.2 million.

Our net loss was $46.9 and $134.2 million for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2021, we had an accumulated deficit of $305.1 million.

Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures.

Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates.

We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through all stages of development and clinical trials and, ultimately, seek regulatory

We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through all stages of development and clinical trials and,

ultimately, seek regulatory approval.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

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If we are unable to secure adequate additional funding, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates or delay our pursuit of potential in-licenses or acquisitions.

As of June 30, 2021, we had cash, cash equivalents and marketable securities of $407.8 million.

As of September 30, 2021, we had cash, cash equivalents and marketable securities of $354.4 million.

We expect our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements for at least the next 24 months from the date of this filing.

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As we diligently work to activate sites for our clinical programs, we are experiencing some impacts to our site initiation activities related to COVID-19, such as, meeting delays with various investigational review bodies or ethics committees that have prioritized COVID-19 -related clinical trials and staffing levels at site hospitals.

Our expected timelines for clinical trials could be delayed by these impacts.

For example, the clinical initiation of our upliFT-D clinical study for PBFT02 and the GALax-C clinical study for PBKR03 were substantially impacted by COVID-19-related issues.

Our expected timelines for clinical trials could be further delayed by these impacts.

Financial Operations Overview

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University of Pennsylvania

We have a research, collaboration and licensing agreement, as recently amended by the Second Expansion Amendment (see below), or the Penn Agreement, with Penn, for research and development collaborations and exclusive license rights to patents for certain products and technologies .

We have a research, collaboration and licensing agreement, as amended most recently in August 2021 (as described below), or the Penn Agreement, with Penn, for research and development collaborations and exclusive license rights to patents for certain products and technologies .

Under the Penn Agreement, in addition to the obligation to fund certain research relating to the preclinical development of selected products and the new exploratory research program in non-rare and/or non-monogenic (or large) CNS indications, initially Alzheimer’s Disease and Temporal Lobe Epilepsy and such other mutually agreed upon large CNS indications, we fund discovery research conducted by Penn through August 2026, and will receive exclusive rights, subject to certain limitations, to technologies resulting from the discovery program for products developed with GTP, such as novel capsids, toxicity reduction technologies and delivery and formulation improvements.

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Under the Penn Agreement, we have ten remaining options available to us to commence additional licensed programs for CNS indications until May 2026.

If we were to exercise any of these remaining options, we would owe Penn a non-refundable upfront fee of $1.0 million.

exploratory program for large CNS indications, initially Alzheimer’s Disease and Temporal Lobe Epilepsy and such other mutually agreed upon large CNS indications.

If we were to exercise any of these remaining options, we would owe Penn a non-refundable upfront fee of $0.5 million per product indication, with another $0.5 million fee owed upon a further developmental milestone .

The Penn Agreement requires that we make payments of up to (i) $16.5 million per product candidate for rare, monogenic disorders in aggregate and (ii) $39.0 million per product candidate in the aggregate arising from the exploratory program for large CNS indications, initially Alzheimer’s Disease and Temporal Lobe Epilepsy and such other mutually agreed upon large CNS indications.

Each payment will be due upon the achievement of specific development milestone events by such licensed product for a first indication, reduced development milestone payments for the second and third indications and no development milestone payments for subsequent indications.

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In addition, we are obligated to pay to Penn a percentage of sublicensing income, ranging from the mid-single digits to low double digits, for sublicenses under the Penn Agreement.

We and Penn entered into an amendment to the Penn Agreement on August 3, 2021, or the Second Expansion Amendment.

Under the Second Expansion Amendment, we and Penn expanded the scope of the collaboration to include certain non-rare and/or non-monogenic (or large) CNS indications, initially Alzheimer’s Disease and Temporal Lobe Epilepsy and such other mutually agreed upon large CNS indications;

We and Penn entered into an amendment, or the Amendment, to the Penn Agreement, on August 3, 2021.

Under the Amendment, we and Penn expanded the scope of the collaboration to include certain non-rare and/or non-monogenic, or large, CNS indications, initially Alzheimer’s Disease and Temporal Lobe Epilepsy and such other mutually agreed upon large CNS indications;

included an exploratory research collaboration to identify targets and early product candidates in such large CNS indications;

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Under the exploratory research program, we will have the right to further develop and commercialize any gene therapy product candidates specific for those selected targets within Alzheimer’s Disease and Temporal Lobe Epilepsy (and any future large CNS indications that are mutually agreed upon) that arise from the exploratory research programs on substantially the same terms of the current Penn Agreement.

The election of any option to any such product candidates will count against our remaining 10 options and will trigger the $1.0 million option fee.

In addition, under the Second Expansion Amendment, the research phase of the Penn Agreement was extended to August 3, 2026.

The election of any option to any such product candidates will count against our remaining 10 options and will trigger the aggregate $1.0 million option fee.

As a result, we now will fund discovery research through August 3, 2026, and will now have until August 3, 2026 to exercise our remaining 10 options.

We will make an upfront payment of $5.0 million within 10 days of signing the Second Expansion Amendment, will reimburse Penn for expenses incurred in the exploratory research program;

will pay an aggregate of $39.0 million in development milestones for each product candidate in which the Company has exercised its option in Alzheimer’s Disease and Temporal Lobe Epilepsy and such other mutually agreed upon large CNS indications (in lieu of the milestones set forth in the existing Penn Agreement) in addition to the royalties and commercial milestones for products set forth under the existing Penn Agreement;

We made an upfront payment of $5.0 million;

will reimburse Penn for expenses incurred in the exploratory research program;

and will pay Penn a tiered transaction fee ranging from 1-2% of the net proceeds upon certain change of control events.

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The Catalent Collaboration Agreement continues to be in effect pursuant to its terms.

Under the terms of the Manufacturing and Supply Agreement, Catalent has agreed to manufacture batches of drug product for our gene therapy product candidates at the Clean Room Suite provided for in the Catalent Collaboration Agreement.

There is a minimum annual purchase commitment owed to Catalent for five years beginning in November 2020, subject to certain inflationary adjustments.

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● expenses incurred to conduct the necessary preclinical studies and clinical trials required to obtain regulatory approval, including payments to Penn for preclinical development;

● costs incurred in obtaining technology licenses related to technology that has not reached technological feasibility and has no alternative future use;

● expenses incurred in obtaining technology licenses related to technology that has not reached technological feasibility and has no alternative future use;

● personnel expenses, including salaries, benefits and share-based compensation expense for employees engaged in research and development functions;

● costs of funding research performed by third parties, including pursuant to agreements with CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials;

● expenses related to funding research performed by third parties, including pursuant to agreements with CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials;

● expenses incurred under agreements with contract manufacturing organizations, or CMOs, including manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical study and clinical trial materials;

● fees paid to consultants who assist with research and development activities;

● expenses and fees paid to consultants who assist with research and development activities;

● expenses related to regulatory activities, including filing fees paid to regulatory agencies;

● allocated expenses for facility costs, including rent, utilities, depreciation and maintenance.

We track outsourced development costs and other external research and development costs to specific product candidates on a program-by-program basis, such as expenses incurred under our collaboration with Penn, fees paid to CROs, CMOs and research laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities.

However, we do not track our internal research and development expenses on a program-by-program basis as they primarily relate to compensation, early research and other costs which are deployed across multiple projects under development.

● allocated expenses for facilities costs, including rent, utilities, depreciation and maintenance.

We track outsourced development expenses and other external research and development expenses to specific product candidates on a program-by-program basis, such as expenses incurred under our collaboration with Penn, fees paid to CROs, CMOs and research laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities.

However, we do not track our internal research and development expenses on a program-by-program basis as they primarily relate to compensation, early research and other expenses which are deployed across multiple projects under development.

Research and development activities are central to our business model.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We expect our research and development expenses to increase significantly over the next several years as we increase personnel costs, including share-based compensation,

conduct our clinical trials, including later-stage clinical trials, for current and future product candidates and prepare regulatory filings for our product candidates.

Costs incurred in obtaining technology licenses are charged to research and development expense as acquired in-process research and development if the technology licensed has not reached technological feasibility and has no alternative future use.

Product candidates in later stages of clinical development generally have higher development expenses than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

We expect our research and development expenses to increase significantly over the next several years as we increase personnel expenses, including share-based compensation, conduct our clinical trials, including later-stage clinical trials, for current and future product candidates and prepare regulatory filings for our product candidates.

Expenses incurred in obtaining technology licenses are charged to research and development expense as acquired in-process research and development if the technology licensed has not reached technological feasibility and has no alternative future use.

General and Administrative Expenses

General and administrative expense consists primarily of personnel expenses, including salaries, benefits and share-based compensation expense, for employees and consultants in executive, finance, accounting, legal, and human resource functions.

General and administrative expense also includes corporate facility costs, including rent, utilities, depreciation and maintenance, not otherwise included in research and development expense, as well as legal fees related to intellectual property and corporate matters and fees for accounting and consulting services.

We expect that our general and administrative expense will increase in the future to support our continued research and development activities, potential commercialization efforts and increased costs of operating as a public company.

These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses.

Additionally, we anticipate continued costs associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of The Nasdaq Stock Market, LLC and the SEC, insurance and investor relations costs.

General and administrative expense also includes corporate facility expenses, including rent, utilities, depreciation and maintenance, not otherwise included in research and development expense, as well as legal expenses related to intellectual property and corporate matters, expenses related to information technology, and expenses for accounting and consulting services.

These increases will likely include increased expenses related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses.

Additionally, we anticipate continued expenses associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of The Nasdaq Stock Market, LLC and the SEC, insurance and investor relations expenses.

If any of our current or future product candidates obtains U.S.

regulatory approval, we expect that we would incur significantly increased expenses associated with building a sales and marketing team.

regulatory approval, we expect that we would incur significantly increased expenses associated with building a commercial sales and marketing team.

Interest Income, net

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Results of Operations

Comparison of the Three Months Ended June 30, 2021 and 2020

The following table sets forth our results of operations for the three months ended June 30, 2021 and 2020.

Comparison of the Three Months Ended September 30, 2021 and 2020

The following table sets forth our results of operations for the three months ended September 30, 2021 and 2020.

Three months ended

September 30,

(in thousands)

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Research and development

Acquired in‑process research and development

General and administrative

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Research and Development Expenses

Research and development expenses increased by $13.2 million to $33.1 million for the three months ended June 30, 2021 from $19.9 million for the three months ended June 30, 2020.

The increase was primarily due to an increase of $13.9 million in clinical manufacturing costs, a $1.7 million increase in clinical development and professional services expense, a $4.8 million increase in personnel-related expense due to an increase in employee headcount, and a $0.4 million increase in facility and other costs.

The $4.8 million increase in personnel-related costs included a one-time share-based compensation expense of $0.9 million associated with the modification of stock options.

Absent this one-time expense, personnel cost would have increased by $3.9 million.

These increases were partially offset by a $7.6

million decrease in research and development costs associated with the Penn Agreement, which relates to costs incurred in the three months ended June 30, 2020 for preclinical work performed in preparation for IND filings for our lead programs and certain pass-through clinical manufacturing costs.

We track outsourced development, outsourced personnel costs and other external research and development costs of specific programs.

We do not track our internal research and development costs on a program-by-program basis.

Research and development expenses increased by $5.8 million to $26.6 million for the three months ended September 30, 2021 from $20.8 million for the three months ended September 30, 2020.

The increase was primarily due to an increase of $1.1 million in clinical manufacturing expenses, a $3.1 million increase in clinical development and professional services expense, a $2.7 million increase in personnel-related expense due to an increase in employee headcount, and a $1.2 million increase in facility and other expenses.

These increases were partially offset by a $2.3 million decrease in research and development expenses associated with the Penn Agreement, which relates to expenses incurred in the three months ended September 30, 2020 for preclinical work performed in preparation for IND filings for

our lead programs.

Expenses associated with the Penn Agreement will continue to vary from quarter to quarter based on the status of our preclinical pipeline and the timing of preclinical work performed.

We track outsourced development, outsourced personnel expenses and other external research and development costs of specific programs.

We do not track our internal research and development expenses on a program-by-program basis.

Research and development expenses are summarized by program in the table below:

Three months ended

September 30,

(in thousands)

Undisclosed program

Internal costs, including personnel related

Internal costs, including personnel related and discovery

Acquired In-Process Research and Development Expenses

The Company did not incur any license fees with Penn during the three months ended June 30, 2021.

We incurred $0.5 million in license fees and $5.0 million in fees related to the August 2021 amendment with Penn during the three months ended September 30, 2021.

General and Administrative Expenses

General and administrative expenses increased by $8.0 million to $15.4 million for the three months ended June 30, 2021 from $7.4 million for the three months ended June 30, 2020.

General and administrative expenses increased by $7.2 million to $15.0 million for the three months ended September 30, 2021 from $7.8 million for the three months ended September 30, 2020.

The increase was primarily due to a $5.3 million increase in personnel-related and share-based compensation expense due to an increase in employee headcount.

Our professional fees and facility costs also increased by $2.0 million, as we expanded our operations to support our research and development efforts and incurred more costs associated with operating as a public company.

Our professional fees and other expenses also increased by $1.8 million, as we expanded our operations to support our research and development efforts and incurred more expenses associated with operating as a public company.

Interest Income, net

Interest income, net was $0.1 million for both three months ended June 30, 2021 and 2020, which is primarily attributable to interest income earned on cash, cash equivalents and marketable securities.

Comparison of the Six Months Ended June 30, 2021 and 2020

The following table sets forth our results of operations for the six months ended June 30, 2021 and 2020.

Six months ended

Interest income, net was $0.2 million and $0.1 million for the three months ended September 30, 2021 and 2020, respectively, which is primarily attributable to interest income earned on cash, cash equivalents and marketable securities.

Comparison of the Nine Months Ended September 30, 2021 and 2020

The following table sets forth our results of operations for the nine months ended September 30, 2021 and 2020.

Nine months ended

September 30,

(in thousands)

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Research and Development Expenses

Research and development expenses increased by $25.1 million to $58.1 million for the six months ended June 30, 2021 from $33.0 million for the six months ended June 30, 2020.

The increase was primarily due to an increase of $19.0 million in clinical manufacturing costs, a $2.1 million increase in clinical development and professional services expense and an $1.0 million increase in facility and other costs.

We also had a $13.8 million increase in personnel-related costs, including one-time share-based compensation expenses of $6.1 million associated with the modification of stock options.

Absent these one-time expenses, personnel cost would have increased by $7.7 million mainly due to an increase in employee headcount in the research and development function.

These increases were partially offset by a $10.8 million decrease in research and development costs associated with the Penn Agreement, which relates to costs incurred in the six months ended June 30, 2020 for preclinical work performed in preparation for IND filings for our lead programs and certain pass-through clinical manufacturing costs.

We track outsourced development, outsourced personnel costs and other external research and development costs of specific programs.

We do not track our internal research and development costs on a program-by-program basis.

Research and development expenses increased by $30.8 million to $84.7 million for the nine months ended September 30, 2021 from $53.9 million for the nine months ended September 30, 2020.

The increase was primarily due to an increase of $20.0 million in clinical manufacturing expenses, a $5.2 million increase in clinical development and professional services expense and an $1.6 million increase in facility and other expenses.

We also had a $17.0 million increase in personnel-related expenses, including share-based compensation expenses of $6.1 million associated with the modification of stock options.

Absent these modification expenses, personnel expenses would have increased by $10.9 million primarily due to an increase in employee headcount in the research and development function.

These increases were partially offset by a $13.0 million decrease in research and development expenses associated with the Penn Agreement, which relates to expenses incurred in the nine months ended September 30, 2020 for preclinical work performed in preparation for IND filings for our lead programs.

Expenses associated with the Penn Agreement will continue to vary from period to period based on the status of our preclinical pipeline and the timing of preclinical work performed.

We track outsourced development, outsourced personnel expenses and other external research and development expenses of specific programs.

We do not track our internal research and development expenses on a program-by-program basis.

Research and development expenses are summarized by program in the table below:

Six months ended

Nine months ended

September 30,

(in thousands)

Undisclosed program

Internal costs, including personnel related

Internal costs, including personnel related and discovery

Acquired In-Process Research and Development Expenses

The Company incurred a license fee with Penn of $1.5 million during the six months ended June 30, 2021 in connection with the achievement of a development milestone.

We incurred $0.5 million in license fees, $1.5 million in fees related to the achievement of a development milestone, and $5.0 million in fees related to the August 2021 amendment with Penn during the nine months ended September 30, 2021.

General and Administrative Expenses

General and administrative expenses increased by $15.7 million to $27.9 million for the six months ended June 30, 2021 from $12.2 million for the six months ended June 30, 2020.

General and administrative expenses increased by $22.9 million to $42.9 million for the nine months ended September 30, 2021 from $20.0 million for the nine months ended September 30, 2020.

The increase was primarily due to a $15.7 million increase in personnel-related and share-based compensation expense due to an increase in employee headcount.

Our professional fees and facility costs also increased by $5.4 million, as we expanded our operations to support our research and development efforts and incurred more costs associated with operating as a public company.

Our professional fees and other expenses also increased by $7.2 million, as we expanded our operations to support our research and development efforts and incurred more expenses associated with operating as a public company.

Interest Income, net

Interest income, net was $0.2 million and $0.5 million for the six months ended June 30, 2021 and 2020, respectively which is primarily attributable to interest income earned on cash, cash equivalents and marketable securities.

Interest income, net was $0.3 million and $0.6 million for the nine months ended September 30, 2021 and 2020, respectively, which is primarily attributable to interest income earned on cash, cash equivalents and marketable securities.

Liquidity and Capital Resources

In January 2021, we received $165.8 million in net proceeds from the sale of our common stock.

As of June 30, 2021, we had $407.8 million in cash, cash equivalents and marketable securities and had an accumulated deficit of $258.2 million.

As of September 30, 2021, we had $354.4 million in cash, cash equivalents and marketable securities and had an accumulated deficit of $305.1 million.

We expect that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements for at least 24 months as of the date of this filing.

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● the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our product candidates;

● the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization;

● the expenses of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization;

● the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates;

● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

● the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;

● the expenses of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

● the expenses and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;

● our ability to establish additional collaborations on favorable terms, if at all;

● the costs required to scale up our clinical, regulatory and manufacturing capabilities;

● the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval;

● the expenses required to scale up our clinical, regulatory and manufacturing capabilities;

● the expenses of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval;

● revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.

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The following table shows a summary of our cash flows for the periods indicated:

Six months ended

Nine months ended

September 30,

(in thousands)

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Net Cash Used in Operating Activities

During the six months ended June 30, 2021, we used $55.0 million of net cash in operating activities.

During the nine months ended September 30, 2021, we used $96.1 million of net cash in operating activities.

Cash used in operating activities reflected a net loss of $134.2 million, which was partially offset by net increase in our operating net liabilities by $1.3 million and non-cash charges of $29.8 million related to share-based compensation, depreciation, amortization of premium and discount, net, and changes in deferred rent.

The primary use of cash was to fund our operations related to the development of our product candidates.

During the six months ended June 30, 2020, we used $33.6 million of net cash in operating activities.

During the nine months ended September 30, 2020, we used $51.1 million of net cash in operating activities.

Cash used in operating activities reflected a net loss of $73.3 million.

The primary use of cash was to fund our operations related to the development of our product candidates.

Cash used in operating activities was partially offset by noncash charges of $6.5 million related to share-based compensation, depreciation, and changes in deferred rent as well as a $4.7 million net

increase in our operating assets and liabilities.

Cash used in operating activities was partially offset by noncash charges of $11.0 million related to share-based compensation, depreciation, and changes in deferred rent as well as a $11.2 million net increase in our operating assets and liabilities.

Net Cash Used in Investing Activities

During the six months ended June 30, 2021, we purchased $132.1 million in marketable securities, had sales and maturities of $108.3 million in marketable securities, had purchases of property and equipment of $4.8 million, and paid $2.0 million for technology licenses.

During the six months ended June 30, 2020, we used $0.2 million, for the purchase of property and equipment.

During the nine months ended September 30, 2021, we purchased $169.9 million in marketable securities, had sales and maturities of $146.0 million in marketable securities, had purchases of property and equipment of $10.8 million, and paid $7.5 million for technology licenses.

During the nine months ended September 30, 2020, we purchased $135.2 million in marketable securities and had purchases of property and equipment of $0.3 million.

Net Cash Provided by Financing Activities

During the six months ended June 30, 2021, we received net proceeds of $165.8 million from the sale of our common stock and received $0.7 million from the exercise of stock options and purchases of stock under the Employee Stock Purchase Plan.

We also paid $0.3 million in deferred offering costs.

During the six months ended June 30, 2020, financing activities provided $228.3 million from the sale of our common stock and convertible preferred stock.

During the six months ended June 30, 2020, we received $46,000 from the exercise of stock options.

During the nine months ended September 30, 2021, we received net proceeds of $165.8 million from the sale of our common stock and received $0.7 million from the exercise of stock options and purchases of stock under the Employee Stock Purchase Plan.

We also paid $0.3 million in deferred offering expenses in connection with the sale of common stock.

During the nine months ended September 30, 2020, financing activities provided $228.3 million from the sale of our common stock and convertible preferred stock.

We also received $0.1 million from the exercise of stock options.

Off-Balance Sheet Arrangements

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Critical Accounting Policies and Estimates

During the six months ended June 30, 2021, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Prospectus.

During the nine months ended September 30, 2021, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Prospectus.

JOBS Act Accounting Election

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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