What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-13 · 128 added, 77 removed, 408 unchanged (33% of the section changed)

3 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

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Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized and no shares issued or outstanding as of March 31, 2024 and December 31, 2023

10,000,000 shares authorized and no shares issued or outstanding as of June 30, 2024 and December 31, 2023

Common stock, $ 0.0001 par value;

150,000,000 shares authorized;

13,258,047 shares issued and outstanding as of March 31, 2024, and 8,791,877 shares issued and outstanding as of December 31, 2023

17,755,506 shares issued and outstanding as of June 30, 2024, and 8,791,877 shares issued and outstanding as of December 31, 2023

Additional paid-in capital 1,145,308 723,577

Accumulated other comprehensive income 3 —

Accumulated other comprehensive loss ( 71 ) —

Accumulated deficit ( 726,151 ) ( 653,921 )

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Collaboration revenue $ 357 $ 781 $ 788 $ 1,464

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net loss $ ( 32,677 ) $ ( 34,312 ) $ ( 72,230 ) $ ( 71,767 )

Change in unrealized gains on marketable securities, net of tax 3 154

Change in unrealized gain (loss) on marketable securities, net of tax ( 74 ) 19 ( 71 ) 173

Comprehensive loss $ ( 32,751 ) $ ( 34,293 ) $ ( 72,301 ) $ ( 71,594 )

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Deficit Accumulated Other

Comprehensive Income Total

Comprehensive Income (Loss) Total

Stockholders’

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Balance at March 31, 2024 13,258,047 $ 13 $ 923,141 $ ( 693,474 ) $ 3 $ 229,683

Stock-based compensation expense — — 5,878 — — 5,878

Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 14,013

3,849,558 1 215,987 — — 215,988

Issuance of common stock from exercise of pre-funded warrants 622,123 — — — — —

Issuance of common stock under employee stock purchase plan 25,146 — 311 — — 311

Vesting of restricted stock units 726 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 242 ) — ( 13 ) — — ( 13 )

Issuance of common stock upon exercise of stock options 148 — 4 — — 4

Change in unrealized loss on marketable securities, net of tax — — — — ( 74 ) ( 74 )

Net loss — — — ( 32,677 ) — ( 32,677 )

Balance at June 30, 2024 17,755,506 $ 14 $ 1,145,308 $ ( 726,151 ) $ ( 71 ) $ 419,100

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

PRAXIS PRECISION MEDICINES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(Amounts in thousands, except share data)

Common Stock 1

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Balance at March 31, 2023 3,864,027 $ 6 $ 632,580 $ ( 568,099 ) $ ( 19 ) $ 64,468

Stock-based compensation expense — — 5,775 — — 5,775

Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 4,484

4,296,646 6 63,433 — — 63,439

Issuance of common stock from at-the-market public offerings, net of issuance costs 392,541 1 6,031 — — 6,032

Issuance of common stock under employee stock purchase plan 15,663 — 208 — — 208

Vesting of restricted stock units 720 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 249 ) — ( 4 ) — — ( 4 )

Change in unrealized loss on marketable securities, net of tax — — — — 19 19

Net loss — — — ( 34,312 ) — ( 34,312 )

Balance at June 30, 2023 8,569,348 $ 13 $ 708,023 $ ( 602,411 ) $ — $ 105,625

1 Results have been retroactively adjusted to reflect the 1-for-15 reverse stock split effected on November 28, 2023.

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(Amounts in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

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Supplemental disclosures of non-cash activities:

Issuance costs from at-the-market offering included in accrued expenses $ 168 $ —

Issuance costs from at-the-market offering included in accounts payable and accrued expenses $ 134 $ —

Offering costs from follow-on offering included in accounts payable $ 108 $ 259

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

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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 (formerly known as PRAX-944), it expects to announce topline results from the ongoing Phase 3 Essential3 clinical trials in essential tremor in the second half of 2024.

Within the Company's PRAX-628 program, it announced positive results from its Photo-Paroxysmal Response ("PPR") study in the first quarter of 2024 and plans to initiate the first of two efficacy studies of PRAX-628 in focal onset seizures in the second half of 2024, with topline results expected in 2025.

The Company plans to initiate a second PRAX-628 efficacy study in focal onset seizures in the first half of 2025, with topline results expected in the first half of 2026.

The Company's PRAX-562 Phase 2 EMBOLD study was initiated in the first quarter of 2023, with cohorts in SCN2A-DEE and SCN8A-DEE;

For the Company's most advanced product candidate under the Cerebrum™ platform, ulixacaltamide, two Phase 3 Essential3 clinical trials in essential tremor are ongoing.

The Company is planning to conduct an interim analysis in the fourth quarter of 2024, with topline results anticipated shortly thereafter.

Within the Company's PRAX-628 program, it announced positive results from its Photo-Paroxysmal Response ("PPR") study in the first quarter of 2024, and plans to initiate four studies to generate patient eligibility, efficacy, safety and pharmacokinetics (PK) data for the program.

The Company intends to initiate an observational study of PRAX-628 in patients with epilepsy in the third quarter of 2024, as well as three efficacy studies.

The first efficacy study will be an open label eight-week study in patients with focal onset seizures or generalized epilepsy to be initiated in the second half of 2024, with topline results expected in the first half of 2025.

The Company also plans to initiate a double-blind, placebo-controlled, 12-week study in focal onset seizures in the fourth quarter of 2024, with topline results expected in the second half of 2025, and plans to initiate a third efficacy study in the first half of 2025.

The Company's relutrigine (formerly known as PRAX-562) Phase 2 EMBOLD study was initiated in the first quarter of 2023, with two cohorts in SCN2A-DEE and SCN8A- DEE;

topline results are expected for both cohorts in the third quarter of 2024.

For the Company's most advanced product candidate under the Solidus™ platform, elsunersen (formerly known as PRAX-222), it shared results from Part 1 of the EMBRAVE study in the fourth quarter of 2023, and is currently completing multiple global regulatory interactions in anticipation of starting the pivotal phase of the program later in 2024.

For the Company's most advanced product candidate under the Solidus™ platform, elsunersen (formerly known as PRAX-222), it shared results from Part 1 of the EMBRAVE study in the fourth quarter of 2023, and has initiated the first arm of the global confirmatory study in Brazil.

It is currently completing multiple global regulatory interactions to further expand the pivotal phase of the program later in 2024.

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, from the sale of common stock through an initial public offering and at-the-market offerings under its shelf registration statement, and from follow-on public offerings of common stock and pre-funded warrants to purchase common stock.

From inception through March 31, 2024, the Company raised $ 785.3 million in aggregate cash proceeds from these transactions, net of issuance costs.

In April 2024, the Company raised net proceeds of $ 215.8 million from a follow-on public offering of common stock and pre-funded warrants.

From inception through June 30, 2024, the Company raised $ 1.0 billion 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.

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.

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 $ 39.6 million for the three months ended March 31, 2024.

In addition, as of March 31, 2024, the Company had an accumulated deficit of $ 693.5 million.

The Company has incurred recurring losses since its inception, including a net loss of $ 72.2 million for the six months ended June 30, 2024.

In addition, as of June 30, 2024, the Company had an accumulated deficit of $ 726.2 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, 2024 of $ 243.3 million will be sufficient to fund its 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 Company expects that its cash, cash equivalents and marketable securities as of June 30, 2024 of $ 433.8 million will be sufficient to fund its 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 future viability of the Company is dependent on its ability to raise additional capital to finance its operations.

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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, 2024 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company's 2023 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 six months ended June 30, 2024 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company's 2023 Annual Report on Form 10-K, other than as noted below.

Reverse Stock Split

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The Company does not believe that it is exposed to more than a nominal amount of credit risk related to any marketable securities it may invest in.

The Company has established guidelines relative to diversification and maturities that maintain safety and liquidity, and periodically reviews and modifies these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

The Company has established guidelines relative to diversification and maturities that maintain

safety and liquidity, and periodically reviews and modifies these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

The Company classifies its investments in debt instruments as available-for-sale.

Available-for-sale investments are reported at fair value at each balance sheet date, and include any unrealized holding gains and

losses in accumulated other comprehensive loss, a component of stockholders’ equity.

Available-for-sale investments are reported at fair value at each balance sheet date, and include any unrealized holding gains and losses in accumulated other comprehensive loss, a component of stockholders’ equity.

Realized gains and losses are included in the Company's condensed consolidated statements of operations.

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Unaudited Interim Condensed Consolidated Financial Information

The accompanying condensed consolidated balance sheet as of March 31, 2024, the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023, the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2024 and 2023, the condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2024 and 2023 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, 2024, the results of its operations for the three months ended March 31, 2024 and 2023 and its cash flows for the three months ended March 31, 2024 and 2023.

Financial statement disclosures for the three months ended March 31, 2024 and 2023 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, 2024 are not necessarily indicative of results to be expected for the year ended December 31, 2024, any other interim periods, or any future year or period.

The accompanying condensed consolidated balance sheet as of June 30, 2024, the condensed consolidated statements of operations for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2024 and 2023, the condensed consolidated statements of cash flows for the six months ended June 30, 2024 and 2023 and the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2024 and 2023 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, 2024, the results of its operations for the three and six months ended June 30, 2024 and 2023 and its cash flows for the six months ended June 30, 2024 and 2023.

Financial statement disclosures for the three and six months ended June 30, 2024 and 2023 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, 2024 are not necessarily indicative of results to be expected for the year ended December 31, 2024, any other interim periods, or any future year or period.

Use of Estimates

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The calculation of weighted average number of common shares outstanding excludes shares of restricted common stock that are not vested but includes shares of common stock underlying pre-funded warrants.

Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period, after giving consideration to the dilutive effect of potentially dilutive common shares.

For purposes of this calculation, outstanding options to purchase shares of common stock, unvested shares of restricted common stock and potential shares issuable under the 2020 ESPP are considered potentially dilutive common shares.

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Cash Equivalents and Marketable Securities

The following is a summary of the Company's investment portfolio as of March 31, 2024.

The Company did not hold any cash equivalents or marketable securities as of December 31, 2023 (in thousands):

As of March 31, 2024

The following is a summary of the Company's investment portfolio as of June 30, 2024 (in thousands).

The Company did not hold any cash equivalents or marketable securities as of December 31, 2023.

As of June 30, 2024

Gross Unrealized Estimated

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Total cash equivalents and marketable securities $ 342,104 $ — $ ( 71 ) $ 342,033

As of March 31, 2024, the Company had 33 securities with a total fair market value of $ 42.6 million in an unrealized loss position.

As of June 30, 2024, the Company had 119 securities with a total fair market value of $ 227.0 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.

1 unchanged sentence

Contractual maturities of the marketable securities at each balance sheet date are as follows (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Within one year $ 224,961 $ —

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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, 2024 and 2023.

The Company did not record any impairment related to its available-for-sale securities during the three and six months ended June 30, 2024 and 2023.

Fair Value Measurements

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

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 March 31, 2024 (in thousands).

The Company did not hold any financial assets measured at fair value on a recurring basis as of December 31, 2023.

As of March 31, 2024

As of June 30, 2024

Level 1 Level 2 Level 3 Total

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Accrued expenses consisted of the following (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Accrued external research and development expenses $ 7,353 $ 2,957

5 unchanged sentences

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, 2024 and December 31, 2023.

This lease qualifies as an operating lease.

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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, 2024, the Company recognized $ 0.4 million in collaboration revenue related to the Collaboration Agreement in the condensed consolidated statement of operations.

As of March 31, 2024, $ 2.1 million was included in deferred revenue in the condensed consolidated balance sheet, of which $ 1.3 million was classified as current.

During the three and six months ended June 30, 2024, the Company recognized $ 0.4 million and $ 0.8 million, respectively, in collaboration revenue related to the Collaboration Agreement in the condensed consolidated statement of operations.

As of June 30, 2024, $ 1.8 million was included in deferred revenue in the condensed consolidated balance sheet, of which $ 1.2 million was classified as current.

Tenacia Collaboration and License Agreement

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(i) $ 10.0 million gross proceeds from the sale of common stock under the Stock Purchase Agreement and (ii) $ 4.8 million, net of tax, related to the up-front payment under the License Agreement, both of which were received in January 2024.

During the three months ended March 31, 2024, the Company had not achieved any development or sales milestones or earned any royalties under the License Agreement.

During the three and six months ended June 30, 2024, the Company had not achieved any development or sales milestones or earned any royalties under the License Agreement.

The Company recorded the common stock sold to BCPE at its issuance date fair value of $ 38.95 per share, or $ 17.3 million in the aggregate, which exceeded the proceeds received which were calculated based on the 20 % premium over the prior 30-day volume-weighted average price.

Accordingly, there is no transaction price allocable to the performance obligation as of March 31, 2024.

Accordingly, there is no transaction price allocable to the performance obligation.

The Company accounted for the excess of the fair value of the equity securities issued over the total proceeds received as consideration paid to a customer for which no distinct good or service was transferred in exchange.

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For agreements where the licenses are considered separate performance obligations or represent the only performance obligation, the Company recognizes revenue at the point in time that the Company effectively grants the license, as the licenses or assignments represent functional intellectual property.

As of March 31, 2024, the Company did not have any receivables or deferred revenue related to the arrangement with Tenacia.

The Company did not recognize any contract assets related to costs to obtain a contract with a customer or costs to fulfill a contract with a customer through March 31, 2024 because no qualifying costs were incurred.

During the three months ended March 31, 2024, the Company did not recognize any revenue associated with the combined arrangement.

As of June 30, 2024, the Company did not have any receivables or deferred revenue related to the arrangement with Tenacia.

The Company did not recognize any contract assets related to costs to obtain a contract with a customer or costs to fulfill a contract with a customer through June 30, 2024 because no qualifying costs were incurred.

During the three and six months ended June 30, 2024, the Company did not recognize any revenue associated with the combined arrangement.

Common Stock and Preferred Stock

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As a result of the Reverse Stock Split, every 15 shares of the Company's issued and outstanding common stock were automatically reclassified into one validly issued, fully-paid and non-assessable share of common stock.

Any fractional post-split shares as a result of the Reverse Stock Split were rounded down to the nearest whole post-split share.

Any fractional post-split shares as a result of the Reverse Stock Split were rounded down to the nearest whole post-

The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock.

All share amounts and per share amounts for the period prior to the Effective Time disclosed in this Quarterly Report on Form 10-Q have been restated to reflect the Reverse Stock Split on a retroactive basis.

As of March 31, 2024 and December 31, 2023, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value.

As of March 31, 2024 and December 31, 2023, the Company did no t hold any treasury shares.

As of June 30, 2024 and December 31, 2023, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value.

As of June 30, 2024 and December 31, 2023, the Company did no t hold any treasury shares.

Follow-On Public Offerings

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Total net proceeds generated from the offering were approximately $ 63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

During the three months ended June 30, 2024, all pre-funded warrants associated with this offering were exercised via a cashless exercise, resulting in 469,981 shares of common stock issued.

No cash proceeds associated with the exercise were received by the Company.

As of June 30, 2024, there were no pre-funded warrants associated with this offering outstanding.

January 2024 Public Offering

On January 16, 2024, the Company completed a public offering of:

(i) an aggregate of 3,802,025 shares of its common stock at a public offering price of $ 35.50 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of commons stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $ 35.4999 per share of common stock underlying the warrants.

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

Total net proceeds generated from the offering were approximately $ 161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

The pre-funded warrants are exercisable at any time on or after the date of issuance at the option of the holder, subject to a beneficial ownership blocker that may limit exercisability.

No holder may exercise any portion of the warrants that would cause either the aggregate number of shares of common stock beneficially owned by such holder, together with its affiliates, to exceed 9.99 %, or the combined voting power of the securities beneficially owned by such holder, together with its affiliates, to exceed 9.99 %.

No holder may exercise any portion of the warrants that would cause the aggregate number of shares of common stock beneficially owned by such holder, together with its affiliates, to exceed 4.99 % (or 9.99 %) of the issued and outstanding common stock.

A holder of a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

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Following the occurrence of certain fundamental transactions, the holders of the pre-funded warrants have the right to receive upon exercise of the warrants the same amount and kind of securities, cash, or property as they would have been entitled to receive if they had been holders of the common shares issuable under the warrants immediately prior to such transaction.

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 March 31, 2024, none of the pre-funded warrants had been exercised and all remain outstanding.

January 2024 Public Offering

On January 16, 2024, the Company completed a public offering of:

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

During the three months ended June 30, 2024, 152,145 pre-funded warrants were exercised via a cashless exercise, resulting in 152,142 shares of common stock issued.

No cash proceeds associated with the exercise were received by the Company.

As of June 30, 2024, a total of 904,580 pre-funded warrants associated with this offering remained outstanding.

April 2024 Public Offering

On April 2, 2024 the Company completed a public offering of:

(i) an aggregate of 3,849,558 shares of its common stock at a public offering price of $ 56.50 per share, including the underwriters' full exercise of their option to purchase 530,973 additional shares of common stock, and (ii) pre-funded warrants to purchase 221,238 shares of common stock at a public offering price of $ 56.4999 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 of each underlying share.

Total net proceeds generated from the offering were approximately $ 216.0 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

The pre-funded warrants are exercisable at any time on or after the date of issuance at the option of the holder, subject to a beneficial ownership blocker that may limit exercisability.

No holder may exercise any portion of the warrants that would cause either the aggregate number of shares of common stock beneficially owned by such holder, together with its affiliates, to exceed 4.99 % (or 9.99 %), or the combined voting power of the securities beneficially owned by such holder, together with its affiliates, to exceed 4.99 % (or 9.99 %).

A holder of a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

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As of March 31, 2024, none of the pre-funded warrants had been exercised and all remained outstanding.

The Company determined that the pre-funded warrants related to both the June 2023 and January 2024 public offerings are freestanding financial instruments because they are both legally detachable and separately exercisable from the common stock sold in the offering.

As of June 30, 2024, none of the pre-funded warrants had been exercised and all remained outstanding.

The Company determined that the pre-funded warrants related to the June 2023, January 2024, and April 2024 public offerings are freestanding financial instruments because they are both legally detachable and separately exercisable from the common stock sold in the offering.

As such, the Company evaluated the pre-funded warrants to determine whether they represent instruments that require liability classification pursuant to the guidance in ASC 480.

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Shares reserved for exercise of pre-funded warrants related to the January 2024 Financing 904,580 —

Shares reserved for exercise of pre-funded warrants related to the April 2024 Financing 221,238 —

Shares reserved for future awards under the 2020 Stock Option and Incentive Plan 936,662 148,264

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Preferred Stock

As of March 31, 2024 and December 31, 2023, the authorized capital stock of the Company included 10,000,000 shares of undesignated preferred stock, $ 0.0001 par value.

As of June 30, 2024 and December 31, 2023, the authorized capital stock of the Company included 10,000,000 shares of undesignated preferred stock, $ 0.0001 par value.

Stock-Based Compensation

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In accordance with Rule 5635(c)(4), the Inducement Plan allows the Company to grant awards only to a newly hired employee who was not previously an employee or non-employee director or to an employee who is being rehired following a bona fide period of non-employment if such award is a material inducement to such employee entering into employment.

The total number of shares of common stock authorized for issuance under the Inducement Plan as of March 31, 2024 was 1,000,000 shares.

The total shares of common stock initially authorized for issuance under the

Inducement Plan was 1,000,000 .

In June 2024, the common stock authorized for issuance under the Inducement Plan was reduced by 870,000 shares following stockholder approval of an increase in the shares available for grant under the 2020 Stock Option and Incentive Plan (the "2020 Plan").

The total number of shares of common stock authorized for issuance under the Inducement Plan as of June 30, 2024 was 130,000 shares.

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, 2024 and December 31, 2023 was 1,100,833 shares and 661,240 shares, respectively.

The total number of shares of common stock authorized for issuance under the 2020 Plan as of June 30, 2024 and December 31, 2023 was 1,970,833 shares and 661,240 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 March 31, 2024 and December 31, 2023 was 395,850 shares.

The total number of shares of common stock authorized for issuance under the 2017 Stock Incentive Plan (the "2017 Plan") as of June 30, 2024 and December 31, 2023 was 395,850 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, 2024 and December 31, 2023 was 175,145 shares and 87,227 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 June 30, 2024 and December 31, 2023 was 175,145 shares and 87,227 shares, respectively.

Restricted Stock Units

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Forfeited ( 5,512 ) 59.05

Unvested as of March 31, 2024 97,601 $ 88.63

As of March 31, 2024, total unrecognized compensation cost related to unvested restricted stock units was $ 7.8 million, which is expected to be recognized over a weighted-average period of 2.34 years.

Unvested as of June 30, 2024 101,462 $ 86.13

As of June 30, 2024, total unrecognized compensation cost related to unvested restricted stock units was $ 6.8 million, which is expected to be recognized over a weighted-average period of 2.28 years.

Stock Options

10 unchanged sentences

Cancelled or Forfeited ( 16,568 ) 134.35

Outstanding as of March 31, 2024 1,084,026 $ 114.62 8.38 $ 14,197

Exercisable as of March 31, 2024 689,361 $ 129.09 8.06 $ 7,632

Vested and expected to vest as of March 31, 2024 1,084,026 $ 114.62 8.38 $ 14,197

Outstanding as of June 30, 2024 1,134,459 $ 110.77 8.26 $ 1,712

Exercisable as of June 30, 2024 715,308 $ 130.91 7.84 $ 950

Vested and expected to vest as of June 30, 2024 1,134,459 $ 110.77 8.26 $ 1,712

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, 2024:

Three Months Ended

June 30, Six Months Ended June 30,

Risk-free interest rate 4.35 % 3.94 %

3 unchanged sentences

Weighted average grant-date fair value per share $ 36.61 $ 33.18

As of March 31, 2024, total unrecognized compensation cost related to unvested stock options was $ 24.8 million, which is expected to be recognized over a weighted-average period of 1.88 years.

As of June 30, 2024, total unrecognized compensation cost related to unvested stock options was $ 22.0 million, which is expected to be recognized over a weighted-average period of 1.76 years.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Research and development $ 2,060 $ 1,918 $ 7,658 $ 4,141

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Outstanding stock options 1,134,459 674,279 1,134,459 674,279

2 unchanged sentences

1,243,316 728,861 1,243,316 728,861

Common shares issuable upon exercise of the pre-funded warrants that were sold in connection with the June 2023 and the January 2024 underwritten public offering are included in the calculation of basic weighted average number of common shares outstanding for the three months ended March 31, 2024.

Common shares issuable upon exercise of the pre-funded warrants that were sold in connection with the June 2023, January 2024, and April 2024 underwritten public offering are included in the calculation of basic weighted average number of common shares outstanding for the three and six months ended June 30, 2024.

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.

4 unchanged sentences

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.

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.

2 unchanged sentences

Subsequent Events

April 2024 Financing

On April 2, 2024 the Company completed a public offering of:

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 of each underlying share.

Total net proceeds generated from the offering were approximately $ 215.8 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

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.

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