What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-07 compared with 2023-08-09 · 81 added, 60 removed, 360 unchanged (28% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share and per share data)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current assets:

21 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized and no shares issued or outstanding as of June 30, 2023 and December 31, 2022

10,000,000 shares authorized and no shares issued or outstanding as of September 30, 2023 and December 31, 2022

Common stock, $ 0.0001 par value;

150,000,000 shares authorized;

128,540,223 shares issued and outstanding as of June 30, 2023, and 49,382,453 shares issued and outstanding as of December 31, 2022

128,547,336 shares issued and outstanding as of September 30, 2023, and 49,382,453 shares issued and outstanding as of December 31, 2022

Additional paid-in capital 713,786 606,918

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

16 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

31 unchanged sentences

Balance at June 30, 2023 128,540,223 $ 13 $ 708,023 $ ( 602,411 ) $ — $ 105,625

Stock-based compensation expense — — 5,763 — — 5,763

Vesting of restricted stock units 3,500 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 1,059 ) — ( 1 ) — — ( 1 )

Issuance of common stock upon exercise of stock options 4,672 — 1 — — 1

Net loss — — — ( 24,632 ) — ( 24,632 )

Balance at September 30, 2023 128,547,336 $ 13 $ 713,786 $ ( 627,043 ) $ — $ 86,756

The accompanying notes are an integral part of these condensed consolidated financial statements.

25 unchanged sentences

Balance at June 30, 2022 45,575,406 $ 5 $ 585,070 $ ( 445,526 ) $ ( 680 ) $ 138,869

Stock-based compensation expense — — 6,730 — — 6,730

Issuance of common stock from at-the-market public offerings, net of issuance costs of $ 109

1,105,006 — 2,962 — — 2,962

Vesting of restricted stock units 5,312 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 1,638 ) — ( 6 ) — — ( 6 )

Issuance of common stock upon exercise of stock options 180,241 — 409 — — 409

Change in unrealized loss on marketable securities, net of tax — — — — 144 144

Net loss — — — ( 43,945 ) — ( 43,945 )

Balance at September 30, 2022 46,864,327 $ 5 $ 595,165 $ ( 489,471 ) $ ( 536 ) $ 105,163

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

32 unchanged sentences

Supplemental disclosures of non-cash activities:

Offering costs included in accrued expenses $ 259 $ —

Offering costs from follow-on public offering included in accounts payable $ 184 $ —

Purchases of property and equipment included in accounts payable $ 50 $ —

The accompanying notes are an integral part of these condensed consolidated financial statements.

12 unchanged sentences

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.

The Company intends to initiate two Phase 3 studies in ET in the fourth quarter of 2023, with topline results expected in the second half of 2024.

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 initiated its Phase 3 studies in ET in the fourth quarter of 2023, with enrollment expected to complete in the first half of 2024 and topline results expected in the second half of 2024.

The Company initiated its PRAX-562 Phase 2 EMBOLD study in the first quarter of 2023 and expects to announce topline results in the first half of 2024.

The Company also announced positive results from its PRAX-628 Phase 1 study in May 2023.

In June 2023, the Company initiated a Phase 2 proof of concept study evaluating PRAX-628 in patients with a Photo Paroxysmal Response ("PPR"), with results anticipated by year-end 2023.

In June 2023, the Company initiated a Phase 2 proof of concept study evaluating PRAX-628 in patients with a Photo Paroxysmal Response ("PPR"), with results anticipated in the fourth quarter of 2023.

Upon completion of the PPR study, Praxis plans to initiate a Phase 2 study of PRAX-628 in focal epilepsy in the first half of 2024.

For the Company's most advanced product candidate under the Solidus™ platform, PRAX-222, it initiated the first dose cohort of its EMBRAVE study in the second quarter of 2023 and expects to announce topline results in the second half of 2023.

For the Company's most advanced product candidate under the Solidus™ platform, elsunersen (also known as PRAX-222), the Company completed dosing in the first cohort of its EMBRAVE study and announced preliminary data from the first dose cohort in October 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 and pre-funded warrants through an initial public offering, follow-on public offerings and at-the-market offerings under its shelf registration statement.

From inception through June 30, 2023, the Company raised $ 613.6 million in aggregate cash proceeds from these transactions, net of issuance costs.

From inception through September 30, 2023, the Company raised $ 613.6 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.

3 unchanged sentences

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 substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued.

The Company has incurred recurring losses since its inception, including a net loss of $ 71.8 million for the six months ended June 30, 2023.

In addition, as of June 30, 2023, the Company had an accumulated deficit of $ 602.4 million.

The Company has incurred recurring losses since its inception, including a net loss of $ 96.4 million for the nine months ended September 30, 2023.

In addition, as of September 30, 2023, the Company had an accumulated deficit of $ 627.0 million.

The Company expects to continue to generate operating losses for the foreseeable future.

The Company expects that its cash and cash equivalents as of June 30, 2023 of $ 124.3 million will be sufficient to fund the operating expenditures and capital expenditure requirements necessary to advance its research efforts and clinical trials for at least one year from the date of issuance of these condensed consolidated financial statements.

The analysis included consideration of the Company's current financial needs and ongoing research and development plans, which are limited to advancing product candidates through, but not beyond, their current clinical trials and the ulixacaltamide Phase 3 clinical trials in ET.

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 Company expects that its cash and cash equivalents as of September 30, 2023 of $ 101.1 million will be sufficient to fund the operating expenditures and capital expenditure requirements necessary to advance its research efforts and clinical trials for at least one year from the date of issuance of these condensed consolidated financial statements.

As a result, the Company concluded that it did not identify conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these condensed consolidated financial statements were issued.

The Company’s current operating plan is based on assumptions that may prove to be wrong, and the Company could use its capital resources sooner than it expects.

In this case, the Company would evaluate further reductions in its expenses or to obtain additional financing sooner than it otherwise would, which may not be available or may only be available on terms that are not acceptable to the Company.

Summary of Significant Accounting Policies

2 unchanged sentences

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 and six months ended June 30, 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.

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 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 June 30, 2023, the condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022, the condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2023 and 2022, the condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022 and the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 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 June 30, 2023, the results of its operations for the three and six months ended June 30, 2023 and 2022 and its cash flows for the six months ended June 30, 2023 and 2022.

Financial statement disclosures for the three and six months ended June 30, 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 and six months ended June 30, 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.

The accompanying condensed consolidated balance sheet as of September 30, 2023, the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022, the condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2023 and 2022, the condensed consolidated statements of cash flows for the nine months ended September 30, 2023 and 2022 and the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 30, 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 September 30, 2023, the results of its operations for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 30, 2023 and 2022.

Financial statement disclosures for the three and nine months ended September 30, 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 and nine months ended September 30, 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 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.

disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting periods.

Estimates are periodically reviewed in light of changes in circumstances, facts and experience.

31 unchanged sentences

Marketable Securities

The Company did not hold any marketable securities as of June 30, 2023.

The Company did not hold any marketable securities as of September 30, 2023.

The following is a summary of the Company's investment portfolio as of December 31, 2022 (in thousands):

11 unchanged sentences

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 and six months ended June 30, 2023 and 2022.

The Company did not record any impairment related to its available-for-sale securities during the three and nine months ended September 30, 2023 and 2022.

Fair Value Measurements

5 unchanged sentences

Prices or valuation techniques that require inputs that are both significant to the valuation of the asset and unobservable.

The Company did not hold any financial assets measured at fair value on a recurring basis as of June 30, 2023.

The Company did not hold any financial assets measured at fair value on a recurring basis as of September 30, 2023.

The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of December 31, 2022 (in thousands):

10 unchanged sentences

Accrued expenses consisted of the following (in thousands):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Accrued external research and development expenses $ 4,348 $ 10,734

Accrued milestone expense 6,937 —

Accrued personnel-related expenses 2,020 2,803

1 unchanged sentence

Total accrued expenses $ 6,979 $ 15,850

At June 30, 2023, accrued expenses included $ 6.9 million of milestone expense related to the Research Collaboration, Option and License Agreement between the Company and Ionis Pharmaceuticals, Inc., earned upon initiation of the Company's PRAX-222 EMBRAVE study in the second quarter of 2023.

The milestone was paid in July 2023.

Commitments and Contingencies

1 unchanged sentence

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 June 30, 2023 and December 31, 2022.

This lease qualifies as an operating lease.

10 unchanged sentences

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 and six months ended June 30, 2023, the Company recognized $ 0.8 million and $ 1.5 million, respectively, in collaboration revenue related to the Collaboration Agreement in the condensed consolidated statement of operations.

As of June 30, 2023, $ 3.5 million was included in deferred revenue in the condensed consolidated balance sheet, of which $ 2.0 million was classified as current.

During the three and nine months ended September 30, 2023, the Company recognized $ 0.5 million and $ 1.9 million, respectively, in collaboration revenue related to the Collaboration Agreement in the condensed consolidated statement of operations.

As of September 30, 2023, $ 3.1 million was included in deferred revenue in the condensed consolidated balance sheet, of which $ 1.6 million was classified as current.

Common Stock and Preferred Stock

As of June 30, 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 June 30, 2023 and December 31, 2022, the Company did no t hold any treasury shares.

As of September 30, 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 September 30, 2023 and December 31, 2022, the Company did no t hold any treasury shares.

June 2023 Public Offering

On June 21, 2023, the Company completed a public offering of:

(i) an aggregate of 64,449,690 shares of its common stock at a public offering price of $ 0.95 per share, including the underwriters’ full exercise of their option to purchase 9,299,690 additional shares of common stock, and (ii) pre-funded warrants to purchase 7,050,000 shares of common stock at a public offering price of $ 0.9499 per share of common stock underlying the warrants.

of common stock at a public offering price of $ 0.9499 per share of common stock underlying the warrants.

The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $ 0.0001 per share exercise price for each underlying share.

7 unchanged sentences

In the event of certain fundamental transactions where the consideration payable to the holders of shares of common stock consists solely of cash and/or marketable securities, the pre-funded warrants will automatically be deemed to be exercised in full pursuant to a cashless exercise effective immediately prior to and contingent upon the consummation of such transaction.

As of June 30, 2023, none of the pre-funded warrants had been exercised and remain outstanding.

As of September 30, 2023, none of the pre-funded warrants had been exercised and remain outstanding.

The Company determined that the pre-funded warrants are freestanding financial instruments because they are both legally detachable and separately exercisable from the common stock sold in the offering.

8 unchanged sentences

The Company has reserved the following shares of common stock for future issuance:

September 30,

2023 December 31,

6 unchanged sentences

Preferred Stock

As of June 30, 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.

As of September 30, 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.

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 June 30, 2023 and December 31, 2022 was 9,918,602 shares and 7,449,480 shares, respectively.

The total number of shares of common stock authorized for issuance under the 2020 Stock Option and Incentive Plan (the "2020 Plan”) as of September 30, 2023 and December 31, 2022 was 9,918,602 shares and 7,449,480 shares, respectively.

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 June 30, 2023 and December 31, 2022 was 5,937,763 shares.

The total number of shares of common stock authorized for issuance under the 2017 Stock Incentive Plan (the "2017 Plan") as of September 30, 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 June 30, 2023 and December 31, 2022 was 1,308,408 shares and 981,306 shares, respectively.

The total number of shares of common stock authorized for issuance under the 2020 Employee Stock Purchase Plan (the "2020 ESPP”) as of September 30, 2023 and December 31, 2022 was 1,308,408 shares and 981,306 shares, respectively.

Restricted Stock Units

5 unchanged sentences

Forfeited ( 239,974 ) 11.72

Unvested as of June 30, 2023 657,365 $ 15.94

As of June 30, 2023, total unrecognized compensation cost related to unvested restricted stock units was $ 8.7 million, which is expected to be recognized over a weighted-average period of 2.27 years.

Unvested as of September 30, 2023 633,615 $ 15.91

As of September 30, 2023, total unrecognized compensation cost related to unvested restricted stock units was $ 7.4 million, which is expected to be recognized over a weighted-average period of 2.04 years.

Stock Options

10 unchanged sentences

Cancelled or Forfeited ( 1,838,397 ) 12.78

Outstanding as of June 30, 2023 10,114,195 $ 11.20 8.03 $ 68

Exercisable as of June 30, 2023 4,922,220 $ 13.13 7.28 $ 34

Vested and expected to vest as of June 30, 2023 10,114,195 $ 11.20 8.03 $ 68

Outstanding as of September 30, 2023 9,876,256 $ 10.90 7.97 $ 222

Exercisable as of September 30, 2023 5,223,043 $ 12.59 7.44 $ 112

Vested and expected to vest as of September 30, 2023 9,876,256 $ 10.90 7.97 $ 222

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 and six months ended June 30, 2023:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Risk-free interest rate 4.35 % 3.57 %

3 unchanged sentences

Weighted average grant-date fair value per share $ 1.02 $ 2.08

As of June 30, 2023, total unrecognized compensation cost related to unvested stock options was $ 34.3 million, which is expected to be recognized over a weighted-average period of 1.87 years.

As of September 30, 2023, total unrecognized compensation cost related to unvested stock options was $ 29.1 million, which is expected to be recognized over a weighted-average period of 1.68 years.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

10,671,584 9,997,016 10,671,584 9,997,016

Common shares issuable upon exercise of the pre-funded warrants that were sold in connection with the June 2023 underwritten public offering are included in the calculation of weighted average number of common shares outstanding for the three and six months ended June 30, 2023.

Consistent with the guidance in ASC 260-10-45-13, the underlying common shares are issuable for little to no consideration and there are no vesting conditions or contingencies associated with the warrants.

6 unchanged sentences

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.

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.

1 unchanged sentence

In June 2022, the Company began a strategic realignment across the Cerebrum™ and Solidus™ platforms, which resulted in a reduction of the Company's workforce.

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

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

These costs related to

employee severance, benefits and related costs.

As of December 31, 2022, all costs related to the strategic realignment had been paid.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements