Praxis Precision Medicines, Inc. 10-Q

Item 1. Financial Statements. PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands, except share and per share data) March 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 80,839 $ 61,615 Marketable securities 4,983 38,874 Prepaid expenses and other current assets 8,580 10,351 Total current assets 94,402 110,840 Property and equipment, net 865 971 Operating lease right-of-use assets 2,700 2,901 Other non-current assets 416 416 Total assets $ 98,383 $ 115,128 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 16,986 $ 14,672 Accrued expenses 9,352 15,850 Operating lease liabilities 1,035 1,005 Current portion of deferred revenue 2,543 2,818 Total current liabilities 29,916 34,345 Long-term liabilities: Non-current portion of operating lease liabilities 2,225 2,495 Non-current portion of deferred revenue 1,774 2,182 Total liabilities 33,915 39,022 Commitments and contingencies (Note 6) Stockholders’ equity: Preferred stock, $ 0.0001 par value; 10,000,000 shares authorized and no shares issued or outstanding as of March 31, 2023 and December 31, 2022 — — Common stock, $ 0.0001 par value; 150,000,000 shares authorized; 57,960,387 shares issued and outstanding as of March 31, 2023, and 49,382,453 shares issued and outstanding as of December 31, 2022 6 5 Additional paid-in capital 632,580 606,918 Accumulated other comprehensive loss ( 19 ) ( 173 ) Accumulated deficit ( 568,099 ) ( 530,644 ) Total stockholders’ equity 64,468 76,106 Total liabilities and stockholders’ equity $ 98,383 $ 115,128 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except share and per share data) Three Months Ended March 31, 2023 2022 Collaboration revenue $ 683 $ — Operating expenses: Research and development 25,504 52,652 General and administrative 13,270 16,197 Total operating expenses 38,774 68,849 Loss from operations ( 38,091 ) ( 68,849 ) Other income: Other income, net 636 132 Total other income 636 132 Net loss $ ( 37,455 ) $ ( 68,717 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 0.71 ) $ ( 1.51 ) Weighted average common shares outstanding, basic and diluted 53,102,907 45,455,179 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (Amounts in thousands) Three Months Ended March 31, 2023 2022 Net loss $ ( 37,455 ) $ ( 68,717 ) Change in unrealized losses on marketable securities, net of tax 154 ( 430 ) Comprehensive loss $ ( 37,301 ) $ ( 69,147 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 3 PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (Amounts in thousands, except share data) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Balance at December 31, 2022 49,382,453 $ 5 $ 606,918 $ ( 530,644 ) $ ( 173 ) $ 76,106 Stock-based compensation expense — — 7,593 — — 7,593 Issuance of common stock from at-the-market public offerings, net of issuance costs 8,403,809 1 18,095 — — 18,096 Vesting of restricted stock units 172,798 — — — — — Shares withheld for taxes for vesting of restricted stock units ( 43,317 ) — ( 127 ) — — ( 127 ) Issuance of common stock upon exercise of stock options 44,644 — 101 — — 101 Change in unrealized loss on marketable securities, net of tax — — — — 154 154 Net loss — — — ( 37,455 ) — ( 37,455 ) Balance at March 31, 2023 57,960,387 $ 6 $ 632,580 $ ( 568,099 ) $ ( 19 ) $ 64,468 Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Balance at December 31, 2021 45,300,514 $ 5 $ 567,598 $ ( 316,615 ) $ ( 176 ) $ 250,812 Stock-based compensation expense — — 7,886 — — 7,886 Issuance of common stock from at-the-market public offerings, net of issuance costs 70,410 — 1,368 — — 1,368 Vesting of restricted stock units 81,130 — — — — — Shares withheld for taxes for vesting of restricted stock units ( 17,850 ) — ( 230 ) — — ( 230 ) Issuance of common stock upon exercise of stock options 72,278 — 333 — — 333 Change in unrealized loss on marketable securities, net of tax — — — — ( 430 ) ( 430 ) Net loss — — — ( 68,717 ) — ( 68,717 ) Balance at March 31, 2022 45,506,482 $ 5 $ 576,955 $ ( 385,332 ) $ ( 606 ) $ 191,022 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 PRAXIS PRECISION MEDICINES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands) Three Months Ended March 31, 2023 2022 Cash flows from operating activities: Net loss $ ( 37,455 ) $ ( 68,717 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 106 93 Stock-based compensation expense 7,593 7,886 Non-cash operating lease expense 201 180 Amortization of premiums and discounts on marketable securities, net 45 375 Changes in operating assets and liabilities: Prepaid expenses and other current assets 1,771 ( 1,061 ) Accounts payable 2,314 2,489 Accrued expenses ( 6,498 ) 4,616 Operating lease liabilities ( 240 ) ( 26 ) Deferred revenue ( 683 ) — Other — 56 Net cash used in operating activities ( 32,846 ) ( 54,109 ) Cash flows from investing activities: Purchases of property and equipment — ( 289 ) Purchases of marketable securities — ( 83,022 ) Maturities of marketable securities 34,000 74,761 Net cash provided by (used in) investing activities 34,000 ( 8,550 ) Cash flows from financing activities: Proceeds from at-the-market offerings, net of issuance costs 18,096 1,368 Payment of issuance costs for at-the-market offerings — ( 262 ) Payments of tax withholdings related to vesting of restricted stock units ( 127 ) ( 230 ) Proceeds from exercise of stock options 101 333 Net cash provided by financing activities 18,070 1,209 Increase (decrease) in cash, cash equivalents and restricted cash 19,224 ( 61,450 ) Cash, cash equivalents and restricted cash, beginning of period 62,031 139,720 Cash, cash equivalents and restricted cash, end of period $ 81,255 $ 78,270 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents 80,839 77,854 Restricted cash 416 416 Total cash, cash equivalents and restricted cash $ 81,255 $ 78,270 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 PRAXIS PRECISION MEDICINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Nature of the Business Praxis Precision Medicines, Inc. (“Praxis” or the “Company”) is a clinical-stage biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for central nervous system, or CNS, disorders characterized by neuronal excitation-inhibition imbalance. Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and both rare and more prevalent neurological disorders. The Company is applying genetic insights to the discovery and development of therapies for neurological disorders through two proprietary platforms, using its understanding of shared biological targets and circuits in the brain. Each platform has multiple programs currently, with significant potential for additional program and indication expansion: • Cerebrum ™, the Company's small molecule platform, utilizes deep understanding of neuronal excitability and neuronal networks and applies a series of computational and experimental tools to develop orally available precision therapies • Solidus ™, the Company's antisense oligonucleotide, or ASO, platform, is an efficient, targeted precision medicine discovery and development engine anchored on a proprietary, computational methodology The Company's platforms utilize a deliberate, pragmatic and patient-guided 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, the Company has established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy. For the Company's most advanced product candidate under the Cerebrum™ platform, ulixacaltamide (also known as PRAX-944), topline results from the Phase 2b Essential1 clinical trial in essential tremor ("ET") were announced in the first quarter of 2023. An end-of-Phase 2 meeting is scheduled with the U.S. Food and Drug Administration in June 2023 and the Company intends to initiate a Phase 3 study in ET in the second half of 2023. The Company initiated its PRAX-562 Phase 2 EMBOLD study in the first quarter of 2023 and expects to announce topline results in the fourth quarter of 2023. The Company also announced positive results from its PRAX-628 Phase 1 study in May 2023 and expects to initiate a Phase 2 study in focal epilepsy in the fourth quarter of 2023. For the Company's most advanced product candidate under the Solidus™ platform, PRAX-222, it expects to announce topline results from the first dose cohort of its EMBRAVE study in the second half of 2023. Praxis was incorporated in 2015 and commenced operations in 2016. The Company has funded its 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 its shelf registration statement. From inception through March 31, 2023, the Company raised $ 544.1 million in aggregate cash proceeds from these transactions, net of issuance costs. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Programs currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales. Liquidity In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) , the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise 6 substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. The Company has incurred recurring losses since its inception, including a net loss of $ 37.5 million for the three months ended March 31, 2023. In addition, as of March 31, 2023, the Company had an accumulated deficit of $ 568.1 million. The Company expects to continue to generate operating losses for the foreseeable future. The Company expects that its cash, cash equivalents and marketable securities as of March 31, 2023 may not be sufficient to fund operations for at least the next twelve months from the date of issuance of these condensed consolidated financial statements which raises substantial doubt about the Company's ability to continue as a going concern, and the Company will need to obtain additional funding. The Company expects to finance its operations through potential public or private equity financings, debt financings, collaboration agreements or other capital sources. The future viability of the Company is dependent on its ability to raise additional capital to finance its operations. The Company’s inability to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. There can be no assurance that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and ASUs of the FASB. The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2023 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company's 2022 Annual Report on Form 10-K, other than as noted below. Unaudited Interim Condensed Consolidated Financial Information The accompanying condensed consolidated balance sheet as of March 31, 2023, the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022, the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2023 and 2022, the condensed consolidated statements of cash flows for the three months ended March 31, 2023 and 2022 and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2023 and 2022 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements, and in the opinion of management reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2023, the results of its operations for the three months ended March 31, 2023 and 2022 and its cash flows for the three months ended March 31, 2023 and 2022. Financial statement disclosures for the three months ended March 31, 2023 and 2022 are condensed and do not include all disclosures required for an annual set of financial statements in accordance with GAAP. The results for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for the year ended December 31, 2023, any other interim periods, or any future year or period. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the 7 reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, accrued and prepaid research and development expense, collaboration revenue, stock-based compensation expense and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates. Recently Issued Accounting Pronouncements The Company does not expect any recently issued accounting pronouncements to have a material impact on its financial statements . 3. Marketable Securities The following is a summary of the Company's investment portfolio as of March 31, 2023 and December 31, 2022 (in thousands): As of March 31, 2023 Gross Unrealized Estimated Cost Gains Losses Fair Value Available-for-sale securities: Corporate debt securities $ 5,002 $ — $ ( 19 ) $ 4,983 Total securities with a maturity of one year or less $ 5,002 $ — $ ( 19 ) $ 4,983 Total available-for-sale securities $ 5,002 $ — $ ( 19 ) $ 4,983 As of December 31, 2022 Gross Unrealized Estimated Cost Gains Losses Fair Value Available-for-sale securities: Corporate debt securities $ 35,042 $ — $ ( 163 ) $ 34,879 Debt securities issued by U.S. government agencies 4,005 — ( 10 ) 3,995 Total securities with a maturity of one year or less $ 39,047 $ — $ ( 173 ) $ 38,874 Total available-for-sale securities $ 39,047 $ — $ ( 173 ) $ 38,874 As of March 31, 2023, the Company had 1 security with a total fair market value of $ 5.0 million in an unrealized loss position. The Company believes that any unrealized losses associated with the decline in value of its securities is temporary and primarily related to the change in market interest rates since purchase, and believes that it is more likely than not that it will be able to hold its debt securities to maturity. Therefore, the Company anticipates a full recovery of the amortized cost basis of its debt securities at maturity and an allowance was not recognized. Securities are evaluated for impairment at the end of each reporting period. The Company did not record any impairment related to its available-for-sale securities during the three months ended March 31, 2023 and 2022. 4. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. The Company categorizes financial assets measured at fair value based on a fair value hierarchy. The following fair value hierarchy is used to classify financial assets based on observable inputs and unobservable inputs used to value the financial assets: • Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets; 8 • Level 2: Quoted prices for similar assets in active markets, quoted prices in markets that are not active, or inputs which are unobservable, either directly or indirectly, for substantially the full term of the asset; or • Level 3: Prices or valuation techniques that require inputs that are both significant to the valuation of the asset and unobservable. The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values as of March 31, 2023 and December 31, 2022 (in thousands): As of March 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 62,976 $ — $ — $ 62,976 Marketable securities: Corporate debt securities — 4,983 — 4,983 $ 62,976 $ 4,983 $ — $ 67,959 As of December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 34,181 $ — $ — $ 34,181 Marketable securities: Corporate debt securities — 34,879 — 34,879 Debt securities issued by U.S. government agencies 3,995 — — 3,995 $ 38,176 $ 34,879 $ — $ 73,055 5. Accrued Expenses Accrued expenses consisted of the following (in thousands): March 31, 2023 December 31, 2022 Accrued external research and development expenses $ 6,355 $ 10,734 Accrued personnel-related expenses 1,748 2,803 Accrued other expenses 1,249 2,313 Total accrued expenses $ 9,352 $ 15,850 6. Commitments and Contingencies In May 2021, the Company entered into a sublease agreement for office space located in Boston, Massachusetts that expires on January 31, 2026, with no option to renew or terminate early. The base rent increases by approximately 2 % annually. The Company issued a letter of credit to the landlord related to the security deposit, secured by restricted cash, which is reflected within other non-current assets on the accompanying condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. This lease qualifies as an operating lease. 9 7. UCB Option and License Agreement In December 2022, the Company entered into an Option and License Agreement (“the Collaboration Agreement”) with UCB Biopharma SRL ("UCB") for the discovery of small molecule therapeutics as potential treatments of KCNT1-related epilepsies. Under the terms of the Collaboration Agreement, the Company has agreed to perform general biology-related research services as part of a mutually agreed upon research plan in exchange for a $ 5.0 million upfront payment. In addition, the Company provided UCB an exclusive option to in-license global development and commercialization rights to any resulting KCNT1 small molecule development candidate identified as part of the research plan. If UCB exercises its option to in-license global development and commercialization rights, the Collaboration Agreement stipulates that UCB will assume research, development, manufacturing and commercialization responsibilities and costs. Under the terms of the Collaboration Agreement, the Company will be eligible to receive an option fee and future success-based development and commercialization milestone payments, totaling up to $ 98.5 million, in addition to tiered royalties on net sales of any resulting products from the Collaboration Agreement. The Company concluded that UCB is a customer, and as such, the arrangement falls within the scope of Topic 606. At the commencement of the Collaboration Agreement, the Company identified one performance obligation, which was to perform the research services for UCB. The Company determined the transaction price to be $ 5.0 million, comprised of the upfront payment it received. The option provided to UCB was determined not to be a material right. The Company recognizes revenue for its research services performance obligation over time using an input method over the duration of the research services. During the three months ended March 31, 2023, the Company recognized $ 0.7 million in collaboration revenue related to the Collaboration Agreement in the condensed consolidated statement of operations. As of March 31, 2023, $ 4.3 million was included in deferred revenue in the condensed consolidated balance sheet, of which $ 2.5 million was classified as current. 8. Common Stock and Preferred Stock Common Stock As of March 31, 2023 and December 31, 2022, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value. As of March 31, 2023 and December 31, 2022, the Company did no t hold any treasury shares. Shares Reserved for Future Issuance The Company has reserved the following shares of common stock for future issuance: March 31, 2023 December 31, 2022 Shares reserved for exercise of outstanding stock options 10,691,062 8,838,028 Shares reserved for future awards under the 2020 Stock Option and Incentive Plan 2,113,892 1,650,955 Shares reserved for future awards under the 2020 Employee Stock Purchase Plan 1,167,024 839,922 Shares reserved for vesting of restricted stock units 754,756 743,950 Total shares of authorized common stock reserved for future issuance 14,726,734 12,072,855 Preferred Stock As of March 31, 2023 and December 31, 2022, the authorized capital stock of the Company included 10,000,000 shares of undesignated preferred stock, $ 0.0001 par value . 9. Stock-Based Compensation 2020 Stock Option and Incentive Plan The total number of shares of common stock authorized for issuance under the 2020 Stock Option and Incentive Plan (the "2020 Plan”) as of March 31, 2023 and December 31, 2022 was 9,918,602 shares and 7,449,480 shares, respectively. 10 2017 Stock Incentive Plan The total number of shares of common stock authorized for issuance under the 2017 Stock Incentive Plan (the "2017 Plan") as of March 31, 2023 and December 31, 2022 was 5,937,763 shares. Any authorization to issue new options under the 2017 Plan was cancelled upon the effectiveness of the 2020 Plan and no further awards will be granted under the 2017 Plan. 2020 Employee Stock Purchase Plan The total number of shares of common stock authorized for issuance under the 2020 Employee Stock Purchase Plan (the "2020 ESPP”) as of March 31, 2023 and December 31, 2022 was 1,308,408 shares and 981,306 shares, respectively. Restricted Stock Units The following table summarizes the Company’s restricted stock unit activity: Shares Weighted Average Grant Date Fair Value Unvested as of December 31, 2022 743,950 $ 23.07 Issued 301,550 2.95 Vested ( 172,798 ) 27.89 Forfeited ( 117,946 ) 14.27 Unvested as of March 31, 2023 754,756 $ 15.40 As of March 31, 2023, total unrecognized compensation cost related to unvested restricted stock units was $ 10.5 million, which is expected to be recognized over a weighted-average period of 2.50 years. Stock Options The following table summarizes the Company’s stock option activity: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding as of December 31, 2022 8,838,028 $ 13.93 Granted 2,629,255 2.97 Exercised ( 44,644 ) 2.27 $ 83 Cancelled or Forfeited ( 731,577 ) 10.28 Outstanding as of March 31, 2023 10,691,062 $ 11.53 8.23 $ 23 Exercisable as of March 31, 2023 4,517,923 $ 13.74 7.33 $ 23 Vested and expected to vest as of March 31, 2023 10,488,056 $ 11.47 8.46 $ 23 Valuation of Stock Options The weighted-average assumptions that the Company used in the Black-Scholes option pricing model to determine the grant-date fair value of stock options granted to employees and non-employees on the date of grant were as follows for the three months ended March 31, 2023: 11 Three Months Ended March 31, 2023 Risk-free interest rate 3.51 % Expected term (in years) 6.00 Expected volatility 88.22 % Expected dividend yield — % Weighted average grant-date fair value per share $ 2.22 As of March 31, 2023, total unrecognized compensation cost related to unvested stock options was $ 40.8 million, which is expected to be recognized over a weighted-average period of 2.05 years. Stock-Based Compensation Stock-based compensation expense was allocated as follows (in thousands): Three Months Ended March 31, 2023 2022 Research and development $ 2,223 $ 3,214 General and administrative 5,370 4,672 Total stock-based compensation expense $ 7,593 $ 7,886 10. Net Loss per Share The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have been anti-dilutive: Three Months Ended March 31, 2023 2022 Outstanding stock options 10,691,062 7,862,576 Unvested restricted stock units 754,756 840,277 Potential shares issuable under the 2020 ESPP 179,768 30,341 11,625,586 8,733,194 11. Related Party Transactions On September 11, 2019, the Company entered into a Cooperation and License Agreement (the “License Agreement”) with RogCon Inc. (“RogCon”). Under the License Agreement, RogCon granted to the Company an exclusive, worldwide license under RogCon's intellectual property to research, develop and commercialize products for the treatment of all forms of epilepsy and/or neurodevelopmental disorders in each case caused by any mutation of the SCN2A gene. Pursuant to the terms of the License Agreement, the Company will conduct, at its own cost and expense, the research and development activities assigned to it under the associated research plan. In addition, the Company is responsible for reimbursing RogCon for any costs associated with research and development activities RogCon performs at the request of the Company. One of the founders of RogCon became the Company's General Counsel in June 2020. The Company continues to reimburse RogCon for its out-of-pocket costs incurred for activities performed under the License Agreement. Expenses incurred during all periods presented were not material. 12. Subsequent Events The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the condensed consolidated financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. The Company has concluded that no subsequent events have occurred that require disclosure. 12