What changed in this filing

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Item 1. Financial Statements

2025-05-02 compared with 2024-11-06 · 137 added, 201 removed, 345 unchanged (49% of the section changed)

3 unchanged sentences

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current assets:

13 unchanged sentences

Operating lease liabilities 1,066 1,259

Current portion of deferred revenue 1,170 1,392

Total current liabilities 39,522 37,550

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Non-current portion of operating lease liabilities — 110

Non-current portion of deferred revenue 293 1,161

Total liabilities 39,522 37,660

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Preferred stock, $ 0.0001 par value;

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

10,000,000 shares authorized and no shares issued or outstanding as of March 31, 2025 and December 31, 2024

Common stock, $ 0.0001 par value;

150,000,000 shares authorized;

17,785,697 shares issued and outstanding as of September 30, 2024, and 8,791,877 shares issued and outstanding as of December 31, 2023

20,341,917 shares issued and outstanding as of March 31, 2025, and 19,422,358 shares issued and outstanding as of December 31, 2024

Additional paid-in capital 1,344,577 1,281,522

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Collaboration revenue $ — $ 431

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Net loss per share attributable to common stockholders, basic and diluted $ ( 3.29 ) $ ( 2.84 )

$ ( 2.75 ) $ ( 2.72 ) $ ( 7.21 ) $ ( 16.73 )

Weighted average common shares outstanding, basic and diluted 21,055,834 13,904,374

18,884,562 9,039,427 17,210,604 5,763,121

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

See Note 2 for details.

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net loss $ ( 69,296 ) $ ( 39,553 )

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Deficit Accumulated Other

Comprehensive Income (Loss) Total

Comprehensive Gain Total

Stockholders’

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Stock-based compensation expense — — 8,786 — — 8,786

Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 10,836

3,802,025 — 161,649 — — 161,649

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 376

Issuance of common stock from at-the-market public offerings, net of commission costs of $ 1,120

694,212 — 54,904 — — 54,904

Issuance of common stock from a collaboration and license agreement 443,253 — 17,265 — — 17,265

Issuance of common stock from exercise of pre-funded warrants 173,840 — — — — —

Vesting of restricted stock units 55,850 — — — — —

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Balance at March 31, 2025 20,341,917 $ 14 $ 1,344,577 $ ( 906,036 ) $ 659 $ 439,214

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

Stock-based compensation expense — — 12,432 — — 12,432

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 70

25,189 — 1,442 — — 1,442

Issuance of common stock from exercise of stock options 4,971 — 201 — — 201

Vesting of restricted stock units 51 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 20 ) — ( 1 ) — — ( 1 )

Change in unrealized loss on marketable securities, net of tax — — — — 1,402 1,402

Net loss — — — ( 51,910 ) — ( 51,910 )

Balance at September 30, 2024 17,785,697 $ 14 $ 1,159,382 $ ( 778,061 ) $ 1,331 $ 382,666

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

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other

Comprehensive Loss Total

Comprehensive Gain Total

Stockholders’

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Stock-based compensation expense — — 14,475 — — 14,475

Issuance of common stock from at-the-market public offerings, net of commission costs of $ 560

560,253 1 18,095 — — 18,096

Vesting of restricted stock units 11,516 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 2,875 ) — ( 127 ) — — ( 127 )

Issuance of common stock upon exercise of stock options 2,970 — 101 — — 101

Change in unrealized loss on marketable securities, net of tax — — — — 154 154

Net loss — — — ( 37,455 ) — ( 37,455 )

Balance at March 31, 2023 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 $ 10,836

3,802,025 — 161,649 — — 161,649

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

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

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 376

209,852 — 6,169 — — 6,169

Issuance of common stock from a collaboration and license agreement 443,253 — 17,265 — — 17,265

Vesting of restricted stock units 11,095 — — — — —

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Issuance of common stock upon exercise of stock options 3,634 — 143 — — 143

Change in unrealized gain on marketable securities, net of tax — — — — 3 3

Net loss — — — ( 39,553 ) — ( 39,553 )

Balance at September 30, 2023 8,569,822 $ 13 $ 713,786 $ ( 627,043 ) $ — $ 86,756

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

See Note 2 for details.

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

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

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(Amounts in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

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Deferred revenue — ( 431 )

Other ( 2 ) ( 2 )

Net cash used in operating activities ( 53,010 ) ( 20,857 )

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Maturities of marketable securities 65,993 —

Net cash (used in) provided by investing activities ( 237,576 ) 39,000

Net cash used in investing activities ( 51,064 ) ( 91,220 )

Cash flows from financing activities:

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Payments of tax withholdings related to vesting of restricted stock units ( 1,195 ) ( 137 )

Proceeds from exercise of stock options and employee stock purchase plan purchases 659 310

Proceeds from exercise of stock options 560 143

Net cash provided by financing activities 54,269 182,757

Increase in cash, cash equivalents and restricted cash 87,345 39,470

Increase (decrease) in cash, cash equivalents and restricted cash ( 49,805 ) 70,680

Cash, cash equivalents and restricted cash, beginning of period 215,788 81,716

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Supplemental disclosures of non-cash activities:

Purchase of property and equipment included in accrued expenses $ 64 $ —

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

Offering costs from follow-on 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.

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The Company's platforms utilize a deliberate, pragmatic and patient-guided approach, leveraging a suite of translational tools, including novel transgenic and predictive translational animal models and electrophysiology markers, to enable an efficient path to proof-of-concept in patients.

Through this approach, the Company has established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epile psy.

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

The Company is planning to conduct an interim analysis in the first quarter of 2025.

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

The Company initiated an observational study of vormatrigine in patients with epilepsy in the third quarter of 2024, and has initiated or plans 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 expected to be initiated in the fourth quarter of 2024, with topline results expected in the first half of 2025.

The Company 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 plans to initiate a third efficacy study in the first half of 2025.

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

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.

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

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 September 30, 2024, the Company raised $ 1.0 billion in aggregate cash proceeds from these transactions, net of issuance costs.

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

From inception through March 31, 2025, the Company raised $ 1.2 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.

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.

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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 $ 124.1 million for the nine months ended September 30, 2024.

In addition, as of September 30, 2024, the Company had an accumulated deficit of $ 778.1 million.

The Company has incurred recurring losses since its inception, including a net loss of $ 69.3 million for the three months ended March 31, 2025.

In addition, as of March 31, 2025, the Company had an accumulated deficit of $ 906.0 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 September 30, 2024 of $ 411.2 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 March 31, 2025 of $ 472.0 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 and nine months ended September 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

On November 28, 2023, the Company filed a Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-15 reverse stock split of its common stock (the "Reverse Stock Split").

The Reverse Stock Split became effective at 5:00 p.m., Eastern Time, on November 28, 2023 (the "Effective Time").

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.

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 periods 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.

Marketable Securities Classification

The Company may invest its excess cash in money market funds and debt instruments of the U.S.

Treasury, financial institutions, corporations and U.S.

government agencies with strong credit ratings and an investment grade rating at or above A-1 or P-1 by two of the three nationally recognized statistical rating organizations.

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 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.

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

All of the Company's available-for-sale securities are available for use in its current operations.

The Company classifies marketable securities as either cash equivalents, short-term, or long-term based on their stated maturity dates as it is more-likely-than-not that the Company will hold these assets through to their maturity dates.

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2025 are consistent with those discussed in Note 2 to the consolidated financial statements included in the Company's 2024 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 September 30, 2024, the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023, the condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2024 and 2023, the condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023 and the condensed consolidated statements of stockholders’ equity for the three and nine months ended September 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 September 30, 2024, the results of its operations for the three and nine months ended September 30, 2024 and 2023 and its cash flows for the nine months ended September 30, 2024 and 2023.

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

The accompanying condensed consolidated balance sheet as of March 31, 2025, the condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024, the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2025 and 2024, the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024 and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2025 and 2024 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, 2025, the results of its operations for the three months ended March 31, 2025 and 2024 and its cash flows for the three months ended March 31, 2025 and 2024.

Financial statement disclosures for the three months ended March 31, 2025 and 2024 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, 2025 are not necessarily indicative of results to be expected for the year ended December 31, 2025, any other interim periods, or any future year or period.

Use of Estimates

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The Company classifies warrants issued for the purchase of shares of its common stock as either equity or liability instruments based on an assessment of the specific terms and conditions of each respective contract.

Such assessment includes determining whether the warrants are freestanding financial instruments or embedded in a host instrument, whether the warrants are liabilities within the scope of ASC 480, whether the warrants meet the definition of a derivative in ASC 815 and whether the warrants meet the requirements for equity classification pursuant to the indexation and equity classification criteria in ASC 815.

pursuant to the indexation and equity classification criteria in ASC 815.

The Company determines the classification for its warrants at the time of issuance and updates its assessment, as necessary.

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Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period.

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

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.

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Recently Issued Accounting Pronouncements

On November 27, 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments included in this ASU apply to all public entities that are required to report segment information in accordance with Topic 280, including those with a single reportable segment.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and should be applied retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expenses categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company only has one reportable segment and this ASU impacts disclosures only.

The Company has determined that the effects of adopting the amendments in ASU 2023-07 will only impact its disclosures and not have a material impact on its consolidated financial position and the results of its operations when such amendment is adopted.

On December 14, 2023, the FASB issued ASU No.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures .

2023-09 provides more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and incomes taxes paid information.

For public companies, the amendments are effective for annual periods beginning after December 15, 2024 and should be applied prospectively.

2023-09 provides more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

For public companies, the amendments are effective for annual periods beginning after December 15, 2024 and can be applied prospectively or retrospectively.

The Company has determined that the effects of adopting the amendments in ASU 2023-09 will only impact its disclosures and will not have a material impact on its consolidated financial position and the results of its operations when such amendment is adopted.

In November 2023, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update, or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements.

Cash Equivalents and Marketable Securities

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

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

As of September 30, 2024

The following is a summary of the Company's investment portfolio as of March 31, 2025 and December 31, 2024 (in thousands):

As of March 31, 2025

Gross Unrealized Estimated

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Money market funds $ 94,044 $ — $ — $ 94,044

Available-for-sale marketable securities:

Available-for-sale securities:

Debt securities issued by U.S.

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Total cash equivalents and marketable securities $ 399,841 $ 659 $ — $ 400,500

As of September 30, 2024, the Company had 3 securities with a total fair market value of $ 8.0 million in an unrealized loss position.

As of December 31, 2024

Gross Unrealized Estimated

Cost Gains Losses Fair Value

Cash equivalents:

Money market funds $ 128,652 $ — $ — $ 128,652

Debt securities issued by U.S.

government agencies 15,953 2 — 15,955

Available-for-sale securities:

Debt securities issued by U.S.

government agencies 128,215 475 — 128,690

Corporate debt securities 107,695 157 — 107,852

Commercial paper 8,775 19 — 8,794

Other debt securities 8,819 1 — 8,820

Total cash equivalents and marketable securities $ 398,109 $ 654 $ — $ 398,763

As of March 31, 2025, the Company had 7 securities with a total fair market value of $ 19.4 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.

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Within one year $ 162,424 $ 177,195

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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 and nine months ended September 30, 2024 and 2023.

The Company did not record any impairment related to its available-for-sale securities during the three months ended March 31, 2025 and 2024.

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 September 30, 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 September 30, 2024

As of March 31, 2025

Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 94,044 $ — $ — $ 94,044

Available-for-sale marketable securities:

Debt securities issued by U.S.

Debt securities issued by US.

government agencies 111,284 — — 111,284

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$ 205,328 $ 195,172 $ — $ 400,500

As of December 31, 2024

Level 1 Level 2 Level 3 Total

Money market funds $ 128,652 $ — $ — $ 128,652

Debt securities issued by US.

government agencies 144,644 — — 144,644

Corporate debt securities — 107,852 — 107,852

Commercial paper — 8,794 — 8,794

Other debt securities — 8,821 — 8,821

$ 273,296 $ 125,467 $ — $ 398,763

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Accrued external research and development expenses $ 11,638 $ 13,363

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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 September 30, 2024 and December 31, 2023.

The Company issued a letter of credit to the landlord related to the security deposit, secured by restricted cash, which is reflected within prepaid expenses and other current assets, and other non-current assets on the accompanying condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively.

This lease qualifies as an operating lease.

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If UCB exercises its option to in-license global development and commercialization rights, the Collaboration Agreement stipulates that UCB will assume research, development, manufacturing and commercialization responsibilities and costs.

Under the terms of the Collaboration Agreement, the Company will be eligible to receive an option fee and future success-based development and commercialization milestone payments, totaling up to $ 98.5 million, in addition to tiered royalties on net sales of any resulting products from the Collaboration Agreement.

Under the terms of the Collaboration Agreement, the Company was eligible to receive an option fee and future success-based development and commercialization milestone payments, totaling up to $ 98.5 million, in addition to tiered royalties on net sales of any resulting products from the Collaboration Agreement.

The Company concluded that UCB is a customer, and as such, the arrangement falls within the scope of Topic 606.

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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 and nine months ended September 30, 2024, the Company recognized $ 0.3 million and $ 1.1 million, respectively, in collaboration revenue related to the Collaboration Agreement in the condensed consolidated statement of operations.

As of September 30, 2024, $ 1.5 million was included in deferred revenue in the condensed consolidated balance sheet, of which $ 1.2 million was classified as current.

In December 2024, UCB exercised its option to in-license global development and commercialization rights for a KCNT1 development candidate as part of the Collaboration Agreement.

Upon notice of the exercise, the Company recognized the $ 6.0 million option exercise fee and the $ 2.6 million of remaining collaboration revenue associated with the $ 5.0 million up front payment as collaboration revenue within the December 31, 2024 consolidated statement of operations, as the Company had no further research service obligations under the terms of the Collaboration Agreement.

The Company did not recognize any collaboration revenue associated with this Collaboration Agreement during the three months ended March 31, 2025, and as of March 31, 2025, there was no deferred revenue recorded in the condensed consolidated balance sheet.

Tenacia Collaboration and License Agreement

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Total proceeds associated with the combined arrangement at inception were $ 14.8 million consisting of the following:

(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 and nine months ended September 30, 2024, the Company had not achieved any development or sales milestones or earned any royalties under the License Agreement.

(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, 2025, 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.

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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.

As a result, the transaction gives rise to negative revenue on a cumulative basis in the amount of $ 2.5 million, which was recorded in research and development expense in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2024.

As a result, the transaction gives rise to negative revenue on a cumulative basis in the amount of $ 2.5 million, which was recorded at the inception of the collaboration and license agreement in research and development expense in the accompanying consolidated statement of operations.

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 September 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 September 30, 2024 because no qualifying costs were incurred.

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

As of March 31, 2025, 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, 2025 because no qualifying costs were incurred.

During the three months ended March 31, 2025, the Company did not recognize any revenue associated with the combined arrangement.

Common Stock and Preferred Stock

Reverse Stock Split

The Reverse Stock Split became effective at 5:00 p.m., Eastern Time, on November 28, 2023.

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

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

As of March 31, 2025 and December 31, 2024, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value.

As of March 31, 2025 and December 31, 2024, the Company did no t hold any treasury shares.

Follow-On Public Offerings

June 2023 Public Offering

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

(i) an aggregate of 4,296,646 shares of its common stock at a public offering price of $ 14.25 per share, including the underwriters’ full exercise of their option to purchase 619,979 additional shares of common stock, and (ii) pre-funded warrants to purchase 470,000 shares of common stock at a public offering price of $ 14.2485 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 $ 0.0015 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 the Company.

During the nine months ended September 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 September 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.

(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 common 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.

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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.

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

During the year ended December 31, 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 September 30, 2024, a total of 904,580 pre-funded warrants associated with this offering remained outstanding.

During the three months ended March 31, 2025, 173,843 pre-funded warrants were exercised via cashless exercise, resulting in 173,840 shares of common stock issued.

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

As of March 31, 2025, a total of 730,737 pre-funded warrants associated with this offering remained outstanding.

April 2024 Public Offering

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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.

As of September 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 of March 31, 2025, none of the pre-funded warrants have been exercised and all remained outstanding.

The Company determined that the pre-funded warrants related to the 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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Further, the Company determined that the pre-funded warrants do not meet the definition of a derivative under ASC 815 because they do not meet the criteria regarding no or little initial net investment.

Accordingly, the Company assessed the pre-funded warrants relative to the guidance in ASC

Accordingly, the Company assessed the pre-funded warrants relative to the guidance in ASC No.

815-40, Contracts in Entity’s Own Equity , to determine the appropriate treatment.

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

September 30,

2025 December 31,

Shares reserved for exercise of outstanding stock options 2,050,354 1,809,343

Shares reserved for exercise of pre-funded warrants related to the June 2023 Financing — 470,000

Shares reserved for exercise of pre-funded warrants related to the January 2024 Financing 730,737 904,580

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Preferred Stock

As of September 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.

As of March 31, 2025 and December 31, 2024, 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 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 September 30, 2024 was 130,000 shares.

In January 2025, the number of shares of common stock authorized for issuance under the Inducement Plan was increased by 870,000 shares.

The total number of shares of common stock authorized for issuance under the Inducement Plan as of March 31, 2025 and December 31, 2024 was 1,000,000 shares and 130,000 shares, respectively.

2020 Stock Option and Incentive Plan

The total number of shares of common stock authorized for issuance under the 2020 Plan as of September 30, 2024 and December 31, 2023 was 1,970,833 shares and 661,240 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 March 31, 2025 and December 31, 2024 was 2,941,950 shares and 1,970,833 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 September 30, 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 March 31, 2025 and December 31, 2024 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 September 30, 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 March 31, 2025 and December 31, 2024 was 369,368 shares and 175,145 shares, respectively.

Restricted Stock Units

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Forfeited ( 4,425 ) 69.61

Unvested as of September 30, 2024 222,674 $ 69.98

As of September 30, 2024, total unrecognized compensation cost related to unvested restricted stock units was $ 11.9 million, which is expected to be recognized over a weighted-average period of 2.84 years.

Unvested as of March 31, 2025 522,257 $ 62.23

As of March 31, 2025, total unrecognized compensation cost related to unvested restricted stock units was $ 30.0 million, which is expected to be recognized over a weighted-average period of 3.47 years.

Stock Options

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Cancelled or Forfeited ( 6,117 ) 72.39

Outstanding as of September 30, 2024 1,829,324 $ 90.08 8.71 $ 12,800

Exercisable as of September 30, 2024 878,111 $ 121.03 7.93 $ 6,963

Vested and expected to vest as of September 30, 2024 1,829,324 $ 90.08 8.71 $ 12,800

Outstanding as of March 31, 2025 2,050,354 $ 87.82 8.40 $ 1,117

Exercisable as of March 31, 2025 1,048,080 $ 114.85 7.64 $ 942

Vested and expected to vest as of March 31, 2025 2,050,354 $ 87.82 8.40 $ 1,117

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 nine months ended September 30, 2024:

Three Months Ended

September 30, Nine Months Ended

September 30,

Risk-free interest rate 4.59 %

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Weighted average grant-date fair value per share $ 49.78

As of September 30, 2024, total unrecognized compensation cost related to unvested stock options was $ 43.6 million, which is expected to be recognized over a weighted-average period of 2.55 years.

As of March 31, 2025, total unrecognized compensation cost related to unvested stock options was $ 45.2 million, which is expected to be recognized over a weighted-average period of 2.64 years.

Stock-Based Compensation

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Research and development $ 3,780 $ 5,598

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Outstanding stock options 2,050,354 1,084,026

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2,578,980 1,209,454

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 nine months ended September 30, 2024.

Common shares issuable upon exercise of the pre-funded warrants that were sold in connection with the January 2024 and April 2024 underwritten public offerings are included in the calculation of basic weighted average number of common shares outstanding for the three months ended March 31, 2025.

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.

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Expenses incurred during all periods presented were not material.

Segment Information

The Company has one operating segment.

The Company's operating segment discovers and develops therapies for CNS disorders.

The Company's chief operating decision maker ("CODM"), its Chief Executive Officer, manages the Company's operations on a consolidated basis for the purposes of assessing performance and allocating resources based on net loss that also is reported on the condensed consolidated statement of operations as consolidated net loss.

Net loss is used by the CODM to make key strategic and operational decisions.

The operating segment's revenue is derived from a single domestic collaboration agreement from which the segment licenses certain development or product candidates and has performed research and development services.

The measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets.

The majority of the Company's long-lived assets are held in the United States.

The following table presents selected financial information about the Company's single operating segment for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended

Collaboration revenue $ — $ 431

Program-specific expenses:

Ulixacaltamide 23,513 11,139

Vormatrigine 13,733 732

Relutrigine 5,377 1,006

Elsunersen 761 521

Other early stage assets 1,105 919

Personnel-related expenses 13,030 8,267

Stock-based compensation expense 8,786 14,475

Depreciation expense 47 112

Other segment expenses (a)

Interest income 5,432 2,332

Consolidated net loss $ ( 69,296 ) $ ( 39,553 )

(a) Other segment expenses includes research and development and general and administrative costs not attributable to a specific program .

Subsequent Events

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the condensed consolidated financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure.

The Company 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 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