What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-08 compared with 2022-05-09 · 111 added, 71 removed, 198 unchanged (48% of the section changed)

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Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and disease.

We are applying insights from genetic epilepsies to both rare and more prevalent neurological and psychiatric disorders, using our understanding of shared biological targets and circuits in the brain.

We are applying insights from genetic epilepsies to both rare and more prevalent neurological disorders, using our understanding of shared biological targets and circuits in the brain.

We apply a deliberate and pragmatic precision approach, leveraging a suite of translational tools including novel transgenic and predictive translational animal models and electrophysiology markers, to enable an efficient path to proof-of-concept in patients.

Through this approach, we have established a broad CNS portfolio with multiple programs, including product candidates across psychiatric disorders, movement disorders and epilepsy, with three clinical-stage product candidates.

Each of our clinical-stage product candidates is advancing in more than one indication and we anticipate expansion into additional indications.

We expect multiple topline readouts from our clinical-stage programs and anticipate the launch of two additional clinical development programs this year.

In addition, we have established a robust pipeline of preclinical stage programs through internal research and in-licensing.

Our broad portfolio of CNS programs is currently structured by therapeutic focus in three franchises – Psychiatry, Movement Disorders and Epilepsy.

Within our Psychiatry franchise, our most advanced clinical candidate, PRAX-114, is being developed for the treatment of a broad range of patients suffering from major depressive disorder, or MDD, and post-traumatic stress disorder, or PTSD.

We have completed the Aria Study, a Phase 2/3, placebo-controlled study evaluating PRAX-114 for monotherapy treatment of MDD, and expect to report topline results in June 2022.

Following topline results from the Aria Study, we intend to engage with the U.S.

Food and Drug Administration, or FDA, for an end-of-Phase 2 meeting and subsequently initiate a Phase 3, placebo-controlled study in the fourth quarter of 2022.

We also expect to report topline results from the Acapella Study, a Phase 2, placebo-controlled, dose-ranging study evaluating PRAX-114 for treatment of MDD, in the third quarter of 2022.

In addition, we expect to report topline results from a Phase 2, placebo-controlled study evaluating PRAX-114 for the treatment of PTSD in the second half of 2022.

Within our Movement Disorders franchise, our second clinical candidate, PRAX-944, is being developed for the treatment of Essential Tremor, or ET, and Parkinson's Disease, or PD.

Through this approach, we have established a broad CNS portfolio with multiple programs, including product candidates across movement disorders, epilepsy and psychiatric disorders, with three clinical-stage product candidates.

We expect to announce topline results from the Phase 2b clinical trial in essential tremor, or ET, for our lead clinical-stage movement disorder program, the initiation of two first-in-patient studies for our lead small molecule epilepsy program and our lead antisense oligonucleotide, or ASO, epilepsy program and the launch of an additional clinical development program this year.

In addition, we have established a robust pipeline of preclinical-stage programs through internal research and in-licensing, including one of the largest portfolios of targeted epilepsy programs in the industry.

Within our Movement Disorders franchise, our lead clinical candidate, PRAX-944, is being developed for the treatment of ET and Parkinson's Disease, or PD.

In May 2022, we reported positive topline results from the second cohort of our Phase 2a trial evaluating PRAX-944 for the treatment of ET.

We expect to report topline results from the Phase 2b placebo-controlled Essential1 Study for daytime treatment of ET in the second half of 2022.

Following the topline results from the second cohort, Part B, of the Phase 2a study of PRAX-944 for the treatment of ET, we intend to change the primary endpoint of the Essential1 Study from safety to efficacy.

We also initiated a Phase 2, placebo-controlled, crossover study to evaluate the safety, pharmacokinetics, or PK, and efficacy of daytime dosing of PRAX-114 for the treatment of ET in the first quarter of 2022 and expect to report topline results in the second half of 2022.

In addition, the FDA cleared the Investigational New Drug, or IND, submission for a Phase 2 study of PRAX-944 for the treatment of PD.

We intend to initiate a Phase 2, placebo-controlled trial to evaluate the safety, PK and efficacy of PRAX-944 as a non-dopaminergic treatment for the motor symptoms of PD in the second half of 2022.

Within our Epilepsy franchise, we expect to initiate a Phase 2, placebo-controlled study with our third clinical-stage candidate, PRAX-562, in the second half of 2022 for the treatment of rare pediatric Developmental and Epileptic Encephalopathies.

Our most advanced preclinical stage product candidate within our Epilepsy franchise,

PRAX-222, is an antisense oligonucleotide, or ASO, designed to decrease the expression levels of the protein encoded by the gene SCN2A in patients with gain-of-function SCN2A mutations.

In April 2022, we announced that we received an email communication from the FDA that our IND application for the first-in-patient study of PRAX-222 was place on clinical hold.

The letter detailing the reasons for the hold is expected to be received from the FDA within 30 days of April 28, 2022.

We expect to initiate a Phase 1 study with our preclinical candidate, PRAX-628, in the fourth quarter of 2022 and subsequently initiate a Phase 2 study in focal epilepsy in 2023.

Our preclinical pipeline also consists of discovery programs in development for KCNT1 related epilepsy, three ASOs targeting SCN2A in patients with loss-of-function mutations, PCDH19 and SYNGAP1, respectively, and three additional discovery programs for undisclosed targets in psychiatry, movement disorders and epilepsy.

We plan to declare ASO candidates for PRAX-080 for PCDH19 and PRAX-090 for SYNGAP1 in 2023.

We expect to report topline results from the Phase 2b placebo-controlled Essential1 Study for daytime treatment of ET in the fourth quarter of 2022.

Following the positive Phase 2a topline results announced in May 2022, the primary endpoint of the Essential1 Study was revised to change from baseline to Day 56 on modified Activities of Daily Living and we plan to randomize approximately 130 participants.

We intend to initiate a Phase 2, placebo-controlled trial to evaluate the safety, pharmacokinetics, or PK, and efficacy of PRAX-944 as a non-dopaminergic treatment for the motor symptoms of PD in the second half of 2022, and expect to report topline results in 2023.

Within our Epilepsy franchise, we completed a Phase 1, two-part, placebo controlled study evaluating the safety, tolerability, PK and pharmacodynamics of our lead small molecule epilepsy candidate, PRAX-562.

We are expecting to initiate a Phase 2, placebo-controlled study with PRAX-562 in the second half of 2022 for the treatment of rare pediatric Developmental and Epileptic Encephalopathies, or DEEs, and expect to report topline results in mid-2023.

Our most advanced preclinical stage product candidate within our Epilepsy franchise, PRAX-222, is an ASO designed to decrease the expression levels of the protein encoded by the gene SCN2A in patients with gain-of-function SCN2A mutations.

In April 2022, we announced that we received an email communication from the U.S.

Food and Drug Administration, or FDA, that our Investigational New Drug, or IND, application for the first-in-patient study of PRAX-222 was place on clinical hold.

In June 2022, we announced that additional communication from the FDA indicated that the IND could be cleared upon submission of additional documentation related to the completed 13-week non-human primate toxicology study supporting the starting dose proposed by us.

We have submitted the requested documentation for the 13-week non-human primate toxicology study and will engage with the FDA on the study design as needed, upon completion of their review of these data.

We expect to start a first-in-patient study with PRAX-222 in the second half of 2022.

In addition, we expect to initiate a Phase 1 study with our preclinical candidate, PRAX-628, in the fourth quarter of 2022 and subsequently initiate a Phase 2 study in focal epilepsy in 2023.

Our disclosed preclinical pipeline also consists of discovery programs in development for KCNT1 related epilepsy, three ASOs targeting SCN2A in patients with loss-of-function mutations, PCDH19 and SYNGAP1,

respectively, and two additional discovery programs for undisclosed targets in movement disorders and epilepsy.

We plan to advance ASO candidates, PRAX-080 for PCDH19 and PRAX-090 for SYNGAP1 into preclinical development in 2023.

Within Psychiatry, in June 2022, we announced that the Phase 2/3 Aria Study, evaluating the efficacy and safety of PRAX-114 for monotherapy treatment of major depressive disorder, or MDD, did not achieve statistical significance on the primary endpoint of change from baseline in the 17-item Hamilton Depression Rating Scale total score at Day 15, or on any secondary endpoints.

As a result, we closed screening and enrollment in the Phase 2 Acapella Study which is evaluating the presence of a dose response signal for PRAX-114 in MDD at doses up to 60 mg, and we intend to read out results from approximately 100 patients in the third quarter of 2022.

We also stopped enrollment in the Phase 2 study evaluating PRAX-114 for the treatment of post-traumatic stress disorder and discontinued the Phase 2 crossover study to evaluate the safety, pharmacokinetics and efficacy of daytime dosing of PRAX-114 for the treatment of ET.

We were incorporated in 2015 and commenced operations in 2016.

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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 product candidates, if approved.

We have incurred recurring operating losses since inception, including a net loss of $68.7 million for the three months ended March 31, 2022.

As of March 31, 2022, we had an accumulated deficit of $385.3 million.

We have incurred recurring operating losses since inception, including a net loss of $128.9 million for the six months ended June 30, 2022.

As of June 30, 2022, we had an accumulated deficit of $445.5 million.

We expect to incur significant expenses and operating losses for the foreseeable future as we expand our research and development activities.

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We anticipate that our expenses will be maintained or increased in connection with our ongoing activities, as we:

• advance our lead product candidates, PRAX-114 and PRAX-944, to late stage clinical trials;

• advance our lead product candidate, PRAX-944, to a late stage clinical trial;

• advance our PRAX-562 product candidate to Phase 2 clinical trial;

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• acquire or in-license technology;

• take temporary precautionary measures to help minimize the risk of COVID-19 to our employees;

• increase our headcount to support our development efforts and to expand our clinical development team.

• establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

• take precautionary measures to help minimize the risk of COVID-19 to our employees;

• when needed, increase our headcount to support our development efforts and any future commercialization efforts.

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

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions.

Until such time as we can generate significant revenue from product sales, if ever, we expect to

finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions.

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

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If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

As of March 31, 2022, we had cash, cash equivalents and marketable securities of $222.5 million.

We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditures into the third quarter of 2023.

As of June 30, 2022, we had cash, cash equivalents and marketable securities of $165.4 million.

We believe that our cash, cash equivalents and marketable securities as of June 30, 2022 will enable us to fund our operating expenses and capital expenditures into the first quarter of 2024.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

See “—Liquidity and Capital Resources.”

Restructuring

In June 2022, we began a strategic realignment to focus resources on our Movement Disorders and Epilepsy franchises, which resulted in a reduction of our workforce.

We incurred $1.0 million of costs related to the realignment, of which $0.6 million has been recognized in research and development expenses and $0.4 million has been recognized in general and administrative expenses in the condensed consolidated statement of operations during the three and six months ended June 30, 2022.

These costs relate to employee severance, benefits and related costs.

We do not expect to incur any additional significant costs related to the strategic realignment.

As of June 30, 2022, $0.5 million of the $1.0 million costs were paid.

The remaining $0.5 million of costs are included within accrued expenses on the condensed consolidated balance sheet as of June 30, 2022 and are expected to be disbursed during the period from July 1, 2022 through December 31, 2022.

COVID-19 Business Update

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• costs incurred with third-party contract development and manufacturing organizations to acquire, develop and manufacture materials for preclinical and clinical studies;

• depreciation, amortization and other direct and allocated expenses, including rent, insurance and other operating costs, incurred as a result of our research and development activities.

• depreciation, amortization and other direct and allocated expenses, including rent and other operating costs, incurred as a result of our research and development activities.

We expense research and development costs as incurred.

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The following table reflects our research and development expenses, including direct expenses summarized by major franchise and other exploratory CNS indications and indirect or shared operating costs recognized as research and development expenses during each period presented (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

$ 11,314 $ 6,640 $ 25,752 $ 9,841

10,685 5,839 24,949 10,765

Movement disorders

8,411 3,795 17,515 5,372

Other exploratory CNS indications 248 819 2,439 1,482

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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 that our research and development expenses will continue to increase in the foreseeable future as we advance our product candidates through the development phase, and as we continue to discover and develop additional product candidates, build manufacturing capabilities and expand into additional therapeutic areas.

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 that our research and development expenses will be maintained or increase in the foreseeable future as we advance our product candidates through the development phase, and as we continue to discover and develop additional product candidates, build manufacturing capabilities and expand into additional therapeutic areas.

At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates.

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• the number and scope of preclinical and clinical programs we decide to pursue;

• our ability to successfully complete clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the U.S.

Food and Drug Administration, or FDA, or any comparable foreign regulatory authority;

• our ability to successfully complete clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority;

• our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates;

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and facility-related expenses, which include direct depreciation costs and allocated expenses for office rent and other operating costs.

These costs relate to the operation of the business, unrelated to the research and development function, or any individual franchises or product candidate.

Costs to secure and defend our IP are expensed as incurred and are classified as general and administrative expenses.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support the expected growth in our research and development activities and the potential commercialization of our product candidates.

These costs relate to the operation of the business and are unrelated to the research and development function or any individual franchise or product candidate.

We anticipate that our general and administrative expenses may increase in the future as we increase our headcount, when needed, to support the expected growth in our research and development activities and the potential commercialization of our product candidates.

We also expect to incur additional IP-related expenses as we file patent applications to protect innovations arising from our research and development activities.

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Our income tax provision may be significantly affected by changes to our estimates.

The income tax benefit (provision) for the three months ended March 31, 2022 and 2021 was not material.

The income tax benefit (provision) for the three and six months ended June 30, 2022 and 2021 was not material.

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

Comparison of the Three Months Ended June 30, 2022 and 2021

The following table summarizes our consolidated statements of operations for each period presented (in thousands):

Three Months Ended March 31, Change

Three Months Ended June 30, Change

Operating expenses:

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Loss from operations (60,394) (36,483) (23,911)

Total other income:

Other income:

Other income, net 200 82 118

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The following table summarizes our research and development expenses for each period presented, along with the changes in those items (in thousands):

Three Months Ended March 31, Change

Three Months Ended June 30, Change

$ 11,314 $ 6,640 $ 4,674

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The $17.9 million increase in research and development expenses was primarily attributable to the following:

• $11.2 million increase in expense related to our psychiatry franchise, driven primarily by an increase in clinical-related spend for our PRAX-114 Phase 2/3 Aria and Acapella clinical trials which were initiated in the first quarter and second quarter of 2021, respectively;

• $9.3 million increase in expense related to our epilepsy franchise, driven primarily by an increase in clinical-related spend to support the initiation of our PRAX-562 Phase 2 developmental epileptic encephalopathies clinical trial and our anticipated PRAX-222 seamless clinical trial, an increase in clinical-related spend for our PRAX-562 Phase 1 clinical trial, an increase in preclinical activities for our earlier stage assets, and the payment of a $2.0 million license fee to Ionis Pharmaceuticals, Inc.

in January of 2022 upon exercise of our exclusive option to obtain the rights and license to further develop and commercialize PRAX-222;

• $4.8 million increase in expense related to our epilepsy franchise, driven primarily by an increase in clinical-related spend for our PRAX-562 Phase 1 clinical trial, an increase in preclinical activities for our earlier stage assets and an increase in clinical-related spend to support the initiation of our anticipated PRAX-222 seamless clinical trial and our PRAX-562 Phase 2 DEEs clinical trial;

• $4.7 million increase in expense related to our psychiatry franchise, driven primarily by an increase in clinical-related spend for our PRAX-114 Phase 2 Acapella clinical trial which was initiated in the second quarter of 2021 and our Phase 2 placebo-controlled study evaluating PRAX-114 for the treatment of PTSD which was initiated in the fourth quarter of 2021;

• $4.6 million increase in expense related to our movement disorders franchise, driven primarily by an increase in clinical-related spend for our PRAX-944 Phase 2 Essential1 clinical trial;

• $4.0 million increase in personnel-related costs due to increased headcount.

• $1.5 million increase in other exploratory CNS indications, driven primarily by clinical-related expenses for a planned Phase 2 trial in rare adult cephalgias which we have determined not to pursue, as well as increased preclinical activities for our earlier stage assets;

• $0.5 million increase in other indirect research and development expenses, driven primarily by an increase in technology spend and related consulting costs to support our expanding operations.

General and Administrative Expense

The $6.0 million increase in general and administrative expenses was primarily attributable to the following:

• $5.0 million increase in personnel-related costs, driven primarily by increased headcount, including an increase of $2.4 million in stock-based compensation expense;

• $3.4 million increase in personnel-related costs due to increased headcount;

• $2.6 million increase in other general and administrative expenses, none of which were individually significant.

Other income for the three months ended March 31, 2022 and 2021 was comprised of interest income on our cash, cash equivalents and marketable securities and investment premium and discount amortization.

Other income for the three months ended June 30, 2022 and 2021 was comprised of interest income on our cash, cash equivalents and marketable securities and investment premium and discount amortization.

Comparison of the Six Months Ended June 30, 2022 and 2021

The following table summarizes our consolidated statements of operations for each period presented (in thousands):

Six Months Ended June 30, Change

Operating expenses:

Research and development $ 96,272 $ 43,607 $ 52,665

General and administrative 32,971 20,295 12,676

Total operating expenses 129,243 63,902 65,341

Loss from operations (129,243) (63,902) (65,341)

Other income:

Other income, net 332 128 204

Total other income 332 128 204

Net loss $ (128,911) $ (63,774) $ (65,137)

Research and Development Expense

The following table summarizes our research and development expenses for each period presented, along with the changes in those items (in thousands):

Six Months Ended June 30, Change

Psychiatry $ 25,752 $ 9,841 $ 15,911

Epilepsy 24,949 10,765 14,184

Movement disorders 17,515 5,372 12,143

Other exploratory CNS indications 2,439 1,482 957

Personnel-related (including stock-based compensation) 21,876 13,250 8,626

Other indirect research and development expenses 3,741 2,897 844

Total research and development expenses $ 96,272 $ 43,607 $ 52,665

The $52.7 million increase in research and development expenses was primarily attributable to the following:

• $15.9 million increase in expense related to our psychiatry franchise, driven primarily by an increase in clinical-related spend for our PRAX-114 Phase 2/3 Aria and Phase 2 Acapella clinical trials which were initiated in the first quarter and second quarter of 2021, respectively;

• $14.2 million increase in expense related to our epilepsy franchise, driven primarily by an increase in clinical-related spend to support the initiation of our anticipated PRAX-222 seamless clinical trial and our PRAX-562 Phase 2 developmental epileptic encephalopathies clinical trial, an increase in clinical-related spend for our PRAX-562 Phase 1 clinical trial, an increase in preclinical activities for our earlier stage assets, and the payment of a $2.0 million license fee to Ionis Pharmaceuticals, Inc.

in January of 2022 upon exercise of our exclusive option to obtain the rights and license to further develop and commercialize PRAX-222;

• $12.1 million increase in expense related to our movement disorders franchise, driven primarily by an increase in clinical-related spend for our PRAX-944 Phase 2 Essential1 clinical trial;

• $8.6 million increase in personnel-related costs due to increased headcount.

General and Administrative Expense

The $12.7 million increase in general and administrative expenses was primarily attributable to the following:

• $8.4 million increase in personnel-related costs due to increased headcount;

• $3.6 million increase in professional fees, including a $1.4 million increase in legal fees due to increased corporate activity and patent-related work.

Other income for the six months ended June 30, 2022 and 2021, was comprised of interest income on our cash, cash equivalents and marketable securities and investment premium and discount amortization.

Liquidity and Capital Resources

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We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all.

To date, we have financed our operations primarily with proceeds from the sale and issuance of equity securities.

From inception through March 31, 2022, we have raised $517.8 million in aggregate cash proceeds from such transactions, net of issuance costs.

As of March 31, 2022, we had cash, cash equivalents and marketable securities of $222.5 million.

To date, we have financed our operations primarily with proceeds from the issuance of redeemable convertible preferred stock and from the sale of common stock through an initial public offering, a follow-on public offering and at-the-market offerings under our shelf registration statement.

From inception through June 30, 2022, we have raised $517.8 million in aggregate cash proceeds from such transactions, net of issuance costs.

As of June 30, 2022, we had cash, cash equivalents and marketable securities of $165.4 million.

On November 3, 2021, we entered into an Open Market Sale Agreement, or the sales agreement, with Jefferies LLC, or Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $125.0 million of common stock from time to time in at-the-market offerings for which Jefferies acts as sales agent.

During the three months ended March 31, 2022, we issued and sold 70,410 shares under the sales agreement for aggregate net proceeds of $1.4 million.

During the three months ended June 30, 2022, we did not sell any shares under the sales agreement.

During the six

months ended June 30, 2022, we issued and sold 70,410 shares under the sales agreement for aggregate net proceeds of $1.4 million.

We have issued and sold a total of 462,407 shares under the sales agreement for aggregate net proceeds of $8.4 million after deducting commissions and offering expenses payable by us.

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The following table provides information regarding our cash flows for each period presented (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash (used in) provided by:

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The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges and changes in operating assets and liabilities, which are primarily the result of increased expenses and timing of vendor payments.

During the three months ended March 31, 2022, net cash used in operating activities of $54.1 million was primarily due to our $68.7 million net loss, partially offset by $8.5 million of non-cash charges primarily related to stock-based compensation, and $6.1 million in changes in operating assets and liabilities primarily related to increases in accounts payable and accrued expenses.

During the three months ended March 31, 2021, net cash used in operating activities of $25.7 million was primarily due to our $27.4 million net loss and $3.5 million in changes in operating assets and liabilities primarily related to a decrease in accrued expenses and prepaid expenses and other current assets, partially offset by $5.1 million of non-cash charges primarily related to stock-based compensation.

During the six months ended June 30, 2022, net cash used in operating activities of $111.3 million was primarily due to our $128.9 million net loss, partially offset by $16.7 million of non-cash charges primarily related to stock-based compensation and $0.9 million in changes in operating assets and liabilities primarily related to an increase in accounts payable and a decrease in prepaid expenses and other current assets.

During the six months ended June 30, 2021, net cash used in operating activities of $55.7 million was primarily due to our $63.8 million net loss and $3.4 million in changes in operating assets and liabilities primarily related to a decrease in accrued expenses and an increase in prepaid expenses and other current assets, partially offset by $11.4 million of non-cash charges primarily related to stock-based compensation.

Investing Activities

During the three months ended March 31, 2022, net cash used in investing activities of $8.6 million was primarily related to the purchase of marketable securities, partially offset by the maturity of marketable securities.

During the three months ended March 31, 2021, net cash used in investing activities of $140.0 million was primarily related to the purchase of marketable securities.

During the six months ended June 30, 2022, net cash provided by investing activities of $26.3 million was primarily related to maturities of marketable securities, partially offset by purchases of marketable securities.

During the six months ended June 30, 2021, net cash used in investing activities of $164.2 million was primarily related to the purchase of marketable securities.

Financing Activities

During the three months ended March 31, 2022, net cash provided by financing activities of $1.2 million consisted of net proceeds from at-the-market offerings of $1.4 million and net proceeds from the exercise of stock options of $0.3 million partially offset by the payment of issuance costs for our at-the-market offerings and the payment of taxes related to the vesting of restricted stock units.

During the three months ended March 31, 2021, net cash provided by financing activities was not material.

During the six months ended June 30, 2022, net cash provided by financing activities of $1.7 million consisted of net proceeds from at-the-market offerings of $1.4 million and proceeds from purchases of common stock under our employee stock purchase plan and from the exercise of stock options, partially offset by the payment of issuance costs for our at-the-market offerings and the payment of taxes related to the vesting of restricted stock units.

During the six months ended June 30, 2021, net cash provided by financing activities of $99.7 million consisted of net proceeds from our follow-on public offering of $98.6 million and net proceeds from the exercise of stock options, partially offset by the payment of issuance costs for our initial public offering..

Plan of Operation and Future Funding Requirements

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We anticipate that our expenses will increase substantially if and as we:

• advance the clinical development of our clinical-stage product candidates within our psychiatry, movement disorders and epilepsy franchises, respectively;

• advance the clinical development of our clinical-stage product candidates within our movement disorders and epilepsy franchises;

• advance the development of any additional product candidates;

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• potentially establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities to commercialize any products for which we may obtain regulatory approval;

• add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts and to support our operations as a public company;

• when needed, add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts and to support our operations as a public company;

• experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.

We are unable to estimate the exact amount of our working capital requirements, but based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will enable us to fund

our operating expenses and capital expenditure requirements into the third quarter of 2023.

In June 2022, following the Aria Study topline results, we announced a strategic realignment to focus resources on our Movement Disorders and Epilepsy franchises, which resulted in a reduction of our workforce and future operating expenses and extended our cash runway .

We are unable to estimate the exact amount of our working capital requirements, but based on our current operating plan, we believe that our cash, cash equivalents and marketable securities as of June 30, 2022 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2024.

However, we have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.

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If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional

funds through equity or debt financings when needed, we may be required to delay, limit or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourselves.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourselves.

Critical Accounting Policies and Significant Judgments and Estimates

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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