What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-06 compared with 2024-08-13 · 67 added, 61 removed, 258 unchanged (33% of the section changed)

11 unchanged sentences

Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy.

For our most advanced product candidate under the Cerebrum™ platform, ulixacaltamide (formerly known as PRAX-944), our Phase 3 Essential3 clinical trials in essential tremor, or ET, are ongoing.

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

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

We plan 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.

We also plan 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 plan to initiate a third efficacy study in the first half of 2025.

Our 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 our most advanced product candidate under the Cerebrum™ platform, ulixacaltamide, our Phase 3 Essential3 clinical trials in essential tremor, or ET, are ongoing.

We are planning to conduct an interim analysis in the first quarter of 2025.

Within our vormatrigine program (formerly known as PRAX-628), we announced positive results from our Photo-Paroxysmal Response ("PPR") study in the first quarter of 2024, and have initiated or plan to initiate four studies to generate patient eligibility, efficacy, safety and pharmacokinetics (PK) data for the program.

We initiated an observational study of vormatrigine in patients with epilepsy in the third quarter of 2024, and iniatiated or plan to initiate 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 fourth quarter of 2024, with topline results expected in the first half of 2025.

We have also initiated 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 plan to initiate a third efficacy study in the first half of 2025.

Within our relutrigine program (formerly known as PRAX-562), we announced positive topline results from the first cohort of our EMBOLD study in the third quarter of 2024, and have initiated enrollment of the second cohort, with topline results expected in the first half of 2026.

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

8 unchanged sentences

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

We have incurred recurring operating losses since inception, including a net loss of $72.2 million for the six months ended June 30, 2024.

As of June 30, 2024, we had an accumulated deficit of $726.2 million.

We have incurred recurring operating losses since inception, including a net loss of $124.1 million for the nine months ended September 30, 2024.

As of September 30, 2024, we had an accumulated deficit of $778.1 million.

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

2 unchanged sentences

• advance our lead product candidate, ulixacaltamide, through the Phase 3 Essential3 clinical trial program for ET;

• advance our PRAX-562 product candidate in the EMBOLD clinical trial;

• advance relutrigine (formally PRAX-562) in the EMBOLD and EMERALD clinical trials;

• advance elsunersen (formerly PRAX-222) into the pivotal stage of the program;

• advance our PRAX-628 product candidate into efficacy clinical trials for focal onset seizures;

• advance vormatrigine (formerly PRAX-628) into efficacy clinical trials for focal onset seizures or generalized epilepsy;

• advance our preclinical candidates to clinical trials;

13 unchanged sentences

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

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $433.8 million.

We expect that our cash, cash equivalents and marketable securities as of June 30, 2024 will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our research efforts and clinical trials into 2027.

The analysis included consideration of our current financial needs and ongoing research and development plans.

As of September 30, 2024, we had cash, cash equivalents and marketable securities of $411.2 million.

We expect that our cash, cash equivalents and marketable securities as of September 30, 2024 will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our research efforts and clinical trials into 2027.

The analysis included consideration of our current financial needs and ongoing research and

development plans.

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

10 unchanged sentences

As discussed in Note 7 to our condensed consolidated financial statements, we entered into an Option and License Agreement, or the Collaboration Agreement, with UCB Biopharma SRL, or UCB, in December 2022.

We recognized $0.4 million and $0.8 million, respectively, of collaboration revenue from the Collaboration Agreement during the three and six months ended June 30, 2024, compared to $0.8 million and $1.5 million, respectively, during the three and six months ended June 30, 2023.

We recognized $0.3 million and $1.1 million, respectively, of collaboration revenue from the Collaboration Agreement during the three and nine months ended September 30, 2024, compared to $0.5 million and $1.9 million, respectively, during the three and nine months ended September 30, 2023.

Operating Expenses

12 unchanged sentences

We expense research and development costs as incurred.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors and our clinical investigative sites.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors and

our clinical investigative sites.

Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our condensed consolidated balance sheets as prepaid expenses or accrued expenses.

Non-refundable advance payments for goods or services to be received

in the future for use in research and development activities are deferred and capitalized, even when there is no alternative future use for the research and development.

Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized, even when there is no alternative future use for the research and development.

The capitalized amounts are expensed as the related goods are delivered or the services are performed.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

46 unchanged sentences

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

There was no income tax provision recognized for the three and six months ended June 30, 2024 and 2023.

There was no income tax provision recognized for the three and nine months ended September 30, 2024 and 2023.

Results of Operations

Comparison of the Three Months Ended June 30, 2024 and 2023

Comparison of the Three Months Ended September 30, 2024 and 2023

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

Three Months Ended

June 30, Change

September 30, Change

Collaboration revenue $ 302 $ 468 $ (166)

14 unchanged sentences

Three Months Ended

June 30, Change

September 30, Change

$ 27,474 $ 5,832 $ 21,642

5 unchanged sentences

• $21.6 million increase in expense related to our Cerebrum™ platform, driven primarily by:

◦ a $8.6 million increase in spend for our ulixacaltamide program due to Essential3 study activity and Phase 1 trial spend, partially offset by prior year spend for our Essential1 study;

◦ a $0.4 million increase in spend for our PRAX-562 program related to our EMBOLD Phase 2 clinical trial;

◦ a $0.6 million decrease in spend for our PRAX-628 program, primarily related to prior year clinical-related spend, partially offset by current quarter startup costs associated with our Phase 2 efficacy studies in focal onset seizures;

◦ a $0.4 million decrease in activities for our earlier stage assets.

• $8.2 million decrease in expense within our Solidus™ platform for elsunersen, driven by a prior year milestone payment of $6.9 million due to Ionis Pharmaceuticals Inc., or Ionis, upon initiation of our EMBRAVE study, as well as prior year EMBRAVE study activity and toxicology-related spend;

• $1.7 million increase in personnel-related costs.

◦ a $15.7 million increase in spend for our ulixacaltamide program, primarily due to Essential3 study spend, as well as Phase 1 trial spend, partially offset by completion of our Essential1 study in the prior year;

◦ a $5.4 million increase in spend for our vormatrigine program, primarily related to current quarter POWER1, RADIANT and EMPOWER study startup activities, Phase 1 trial spend and manufacturing spend;

◦ a $0.5 million increase in spend for our relutrigine program, primarily related to the EMBOLD Phase 2 clinical trial.

• $4.0 million increase in personnel-related costs, including stock-based compensation expense, due to increased headcount;

• $0.4 million increase in indirect expenses driven primarily by consulting spend;

• $1.5 million decrease in expense related to our Solidus™ platform, driven by prior year spend associated with our elsunersen program.

General and Administrative Expense

The $0.5 million increase in general and administrative expenses is due primarily to increased personnel-related costs.

Other income for the three months ended June 30, 2024 and 2023 was comprised of interest income on our cash, cash equivalents, and marketable securities and investment premium and discount amortization.

The $6.5 million increase in general and administrative expenses was primarily attributable to the following:

• $4.6 million increase in personnel-related costs, mainly due to increased stock-based compensation expense;

• $1.4 million increase in professional expenses mainly due to increased legal, audit and other consulting expenses;

• $0.5 million increase in other expenses, none of which were individually significant.

Other income for the three months ended September 30, 2024 was comprised of interest income on our cash, cash equivalents, and marketable securities and investment premium and discount amortization.

Other income for the three months ended September 30, 2023 was compromised of interest income on our cash and cash equivalents.

Results of Operations

Comparison of the Six Months Ended June 30, 2024 and 2023

Comparison of the Nine Months Ended September 30, 2024 and 2023

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

Six Months Ended

June 30, Change

Nine Months Ended

September 30, Change

Collaboration revenue $ 1,090 $ 1,932 $ (842)

13 unchanged sentences

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

Six Months Ended

June 30, Change

Nine Months Ended

September 30, Change

$ 55,226 $ 23,857 $ 31,369

5 unchanged sentences

• $31.4 million increase in expense related to our Cerebrum™ platform, driven primarily by:

◦ a $13.7 million increase in spend for our ulixacaltamide program, primarily due to clinical-related activities for our Phase 3 program in ulixacaltamide, partially offset by prior year Essential1 study activity;

◦ a $2.2 million decrease in PRAX-628 clinical-related spend due to prior year Phase 1 study activity;

◦ a $29.5 million increase in spend for our ulixacaltamide program, primarily due to clinical-related activities for our Phase 3 program in ulixacaltamide and Phase 1 trial spend, partially offset by prior year Essential1 study activity;

◦ a $3.2 million increase in clinical-related spend for our vormatrigine program, primarily driven by current quarter POWER1, RADIANT, and EMPOWER study startup activities and manufacturing spend;

◦ a $0.3 million increase in spend for our relutrigine program related to our EMBOLD study;

◦ a $1.6 million decrease in activities for our earlier stage assets.

◦ a $0.3 million decrease in spend for our PRAX-562 program.

• $10.7 million decrease in expense within our Solidus™ platform for elsunersen, driven by a prior year milestone payment of $6.9 million due to Ionis upon initiation of our EMBRAVE study, as well as prior year EMBRAVE study activity and toxicology-related spend;

• $4.5 million increase in personnel-related costs, including stock-based compensation expense;

• $0.4 million decrease in indirect expenses, none of which were individually significant.

• $12.1 million decrease in expense related to our Solidus™ platform, driven by a prior year $6.9 million milestone payment due to Ionis Pharmaceuticals Inc., or Ionis, upon initiation of our elsunersen EMBRAVE study, as well as prior year study activity;

• $8.5 million increase in personnel-related costs, primarily stock-based compensation expense.

General and Administrative Expense

1 unchanged sentence

• $8.3 million increase in personnel-related costs mainly due to increased stock-based compensation expense;

• $1.1 million decrease in professional expenses mainly due to decreased consulting and legal expe nse.

• $0.3 million increase in professional fees, primarily audit fees;

• $0.5 million increase in other expenses, none of which were individually significant.

Other income for the nine months ended September 30, 2024 and 2023 was comprised of interest income on our cash, cash equivalents, and marketable securities and investment premium and discount amortization.

Liquidity and Capital Resources

3 unchanged sentences

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

From inception through June 30, 2024, we have raised $1.0 billion in aggregate cash proceeds from such transactions, net of issuance costs.

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $433.8 million.

From inception through September 30, 2024, we have raised $1.0 billion in aggregate cash proceeds from such transactions, net of issuance costs.

As of September 30, 2024, we had cash, cash equivalents and marketable securities of $411.2 million.

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

3 unchanged sentences

The purchase prices per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0015 per share exercise price for each underlying share.

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

Total net proceeds generated from the offering were approximately $63.4 million, after deducting

underwriting discounts, commissions and other offering expenses payable by us.

As of June 30, 2024, all warrants associated with this offering were exercised on a cashless basis with no proceeds received by the Company.

6 unchanged sentences

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

As of June 30, 2024, 152,145 warrants associated with this offering were exercised on a cashless basis with no cash proceeds received by the Company.

As of September 30, 2024, 152,145 warrants associated with this offering were exercised on a cashless basis with no cash proceeds received by the Company.

In March 2024, we entered into an Open Market Sale Agreement, or the 2024 Sales Agreement, with Jefferies, to provide for the offering, issuance, and sale of up to an aggregate amount of $150.0 million of common stock in at-the-market offerings.

During the six months ended June 30, 2024, we issued and sold an aggregate of 17,662 shares under the 2024 Sales Agreement for aggregate net proceeds of $0.9 million, after deducting commissions and offering expenses payable by us.

We did not make any sales under the 2024 Sales Agreement during the three months ended June 30, 2024.

During the nine months ended September 30, 2024, we issued and sold an aggregate of 42,851 shares under the 2024 Sales Agreement for aggregate net proceeds of $2.3 million, after deducting commissions and offering expenses payable by us.

On April 2, 2024, we completed a public offering of:

3 unchanged sentences

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

Six Months Ended

Nine Months Ended

September 30,

Net cash (used in) provided by:

7 unchanged sentences

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

During the six months ended June 30, 2024, net cash used in operating activities of $48.1 million was primarily due to our $72.2 million net loss, partially offset by $2.2 million in changes in operating assets and liabilities primarily related to increases in accounts payable and accrued expenses, and $21.9 million of non-cash charges primarily related to stock-based compensation.

During the six months ended June 30, 2023, net cash used in operating activities of $64.1 million was primarily due to our $71.8 million net loss and $6.3 million in changes in operating assets and liabilities primarily related to decreases in accrued expenses and accounts payable, partially offset by $14.0 million of non-cash charges primarily related to stock-based compensation.

During the nine months ended September 30, 2024, net cash used in operating activities of $75.6 million was primarily due to our $124.1 million net loss, partially offset by $15.8 million in changes in operating assets and

liabilities primarily related to increases in accounts payable and accrued expenses, and $32.7 million of non-cash charges primarily related to stock-based compensation.

During the nine months ended September 30, 2023, net cash used in operating activities of $87.3 million was primarily due to our $96.4 million net loss and $11.0 million in changes in operating assets and liabilities primarily related to decreases in accrued expenses and accounts payable, partially offset by $20.1 million of non-cash charges primarily related to stock-based compensation.

Investing Activities

During the six months ended June 30, 2024, net cash used in investing activities of $287.1 million was primarily related to purchases of marketable securities partially offset by maturities of marketable securities.

During the six months ended June 30, 2023, net cash provided by investing activities of $39.0 million was related to maturities of marketable securities.

During the nine months ended September 30, 2024, net cash used in investing activities of $237.6 million was primarily related to purchases of marketable securities partially offset by maturities of marketable securities.

During the nine months ended September 30, 2023, net cash provided by investing activities of $39.0 million was related to maturities of marketable securities.

Financing Activities

During the six months ended June 30, 2024, net cash provided by financing activities of $399.1 million consisted primarily of net proceeds from our January 2024 and April 2024 follow-on public offerings, our at-the-market offerings and our collaboration and license agreement with Tenacia.

During the six months ended June 30, 2023, net cash provided by financing activities of $87.7 million consisted primarily of net proceeds from at-the-market offerings and our June 2023 follow-on public offering.

During the nine months ended September 30, 2024, net cash provided by financing activities of $400.6 million consisted primarily of net proceeds from our January 2024 and April 2024 follow-on public offerings, our at-the-market offerings and our collaboration and license agreement with Tenacia.

During the nine months ended September 30, 2023, net cash provided by financing activities of $87.7 million consisted primarily of net proceeds from at-the-market offerings and our June 2023 follow-on public offering.

Plan of Operation and Future Funding Requirements

11 unchanged sentences

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

We are unable to estimate the exact amount of our working capital requirements, but based on our current operating plan, we believe that our cash, cash equivalents, and marketable securities as of June 30, 2024 will be sufficient to fund our operating expenses and capital expenditure requirements into 2027.

We are unable to estimate the exact amount of our working capital requirements, but based on our current operating plan, we believe that our cash, cash equivalents, and marketable securities as of September 30, 2024 will be sufficient to fund our operating expenses and capital expenditure requirements into 2027.

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

26 unchanged sentences

The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily

apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

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 2. Management’s Discussion and Analysis