What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-11-10 compared with 2020-08-11 · 81 added, 68 removed, 256 unchanged (37% of the section changed)

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We have assembled four technology platforms, focused on antibodies, T cells, innate immunity and small interfering ribonucleic acid, or siRNA, through internal development, collaborations and acquisitions.

Our current development pipeline consists of product candidates targeting severe acute respiratory syndrome coronavirus 2, or SARS-CoV-2, the virus that causes COVID-19, hepatitis B virus, or HBV, influenza A, human immunodeficiency virus, or HIV, and tuberculosis, or TB.

For SARS-CoV-2, VIR-7831, a SARS-CoV-2-neutralizing monoclonal antibody, or mAb, is planned to start a Phase 2/3 clinical trial program in August 2020 and we anticipate initial clinical data to be available before the end of the year.

VIR-7832, a vaccinal SARS-CoV-2-neutralizing mAb, is planned to initiate a Phase 2 clinical trial later this year.

VIR-2703, a SARS-CoV-2-targeting siRNA, is in preclinical studies, which are expected to be completed by the end of 2020.

Our current development pipeline consists of product candidates targeting severe acute respiratory syndrome coronavirus 2, or SARS-CoV-2 (the virus that causes COVID-19), hepatitis B virus, or HBV, influenza A virus, human immunodeficiency virus, or HIV, and tuberculosis, or TB.

For SARS-CoV-2, VIR-7831, a SARS-CoV-2-neutralizing monoclonal antibody, or mAb, started the lead-in phase of a Phase 2/3 clinical trial program, which is referred to as the COVID-19 Monoclonal antibody Efficacy Trial - Intent to Care Early, or COMET-ICE study, in August 2020 for the early treatment of COVID-19 in patients who are at high risk of hospitalization.

In October 2020, the COMET-ICE study continued into Phase 3 based on a positive evaluation of safety and tolerability data from the Phase 2 lead-in.

We anticipate that interim Phase 3 data may be available as early as January 2021.

Results for the primary endpoint are expected in the first quarter of 2021.

We plan to initiate two additional Phase 3 trials in the COMET clinical development program for VIR-7831 – one for the treatment of hospitalized patients as a sub-study of the National Institutes of Health-sponsored ACTIV-3 trial, which is expected to begin as soon as regulatory and ethical approvals are in place, and another for prophylaxis or prevention of symptomatic infection, which is expected to begin in the first quarter of 2021.

VIR-7832, a vaccinal SARS-CoV-2-neutralizing mAb, is planned to initiate a Phase 1b/2a clinical trial in the first quarter of 2021.

VIR-2703, a SARS-CoV-2-targeting siRNA, is in preclinical studies led by Alnylam Pharmaceuticals, Inc., or Alnylam.

For HBV, VIR-2218, an HBV-targeting siRNA, is currently in an ongoing Phase 2 clinical trial.

Initial Phase 2 data have demonstrated substantial, durable, and dose dependent reduction of hepatitis B virus surface antigen, or HBsAg, and VIR-2218 has been generally well-tolerated.

We recently initiated a Phase 2 clinical trial to combine VIR-2218 with pegylated interferon-alpha, an approved immune modulatory agent.

In addition, we recently initiated a Phase 1 clinical trial for VIR-3434, an HBV-neutralizing mAb.

For influenza A, VIR-2482, a mAb designed for the prevention of influenza A, is currently in a Phase 1/2 clinical trial and has been generally well-tolerated.

For HIV, VIR-1111, an HIV T cell vaccine based on HCMV, is planned to initiate a Phase 1 trial in the second half of this year.

In July 2020, we initiated a Phase 2 clinical trial to combine VIR-2218 with pegylated interferon-alpha, an approved immune modulatory agent.

Initial clinical data are anticipated in 2021.

In addition, in May 2020, we initiated a Phase 1 clinical trial for VIR-3434, an HBV-neutralizing mAb.

The results of this clinical trial are expected to enable us to initiate a Phase 2 combination trial of VIR-3434 in combination with VIR-2218 in 2021.

For influenza A virus, VIR-2482, a mAb designed for the prevention of influenza A, is currently in a Phase 1/2 clinical trial and has been generally well-tolerated.

Initiation of the Phase 2 trial for VIR-2482, which was delayed due to the impact of COVID-19, is now expected in the fourth quarter of 2021 with proof-of-concept results anticipated in the first half of 2022.

For HIV, VIR-1111, an HIV T cell vaccine based on HCMV, is planned to initiate a Phase 1 trial in the fourth quarter of this year.

We have built an industry-leading team that has deep experience in immunology, infectious diseases and product development.

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Prior to our initial public offering, or IPO, we funded our operations primarily from the issuance and sale of convertible preferred stock, and to a lesser extent from revenue from grant agreements with government-sponsored and private organizations, as well as research and development services.

In October 2019, we completed our IPO pursuant to which we received net proceeds of $126.4 million, after deducting underwriting discounts, commissions and offering expenses.

As of June 30, 2020, excluding restricted cash, we had $552.4 million in cash, cash equivalents and short-term investments.

In July 2020, we completed a follow-on offering of our common stock and issued 8,214,285 shares of our common stock for net proceeds of $323.2 million, after deducting underwriting discounts, commissions and offering expenses.

Based upon our current operating plan, we believe that our existing cash, cash equivalents and short-term investments as of June 30, 2020 together with the net proceeds from our July 2020 follow-on offering will enable us to fund our operations through at least the next 12 months from the issuance date of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

For additional information on the follow-on offering, see Note 14—Subsequent Events to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

In October 2019, we completed our IPO pursuant to which w e received net proceeds of $126.4 million, after deducting underwriting discounts, commissions and offering expenses .

In July 2020, we completed a follow-on offering of our common stock and issued 8,214,285 shares of our common stock for net proceeds of $323.

2 million, after deducting underwriting discounts, commissions and offering expenses .

As of September 30, 2020 , excluding restricted cash, we had $826.6 million in cash, cash equivalents and short-term investments.

Based upon our current operating plan, we believe that our existing cash, cash equivalents and short-term investments as of September 30, 2020 will enable us to fund our operations through at least the next 12 months from the issuance date of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10- Q .

We have incurred significant operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future.

We do not have any products approved for sale, we have not generated any revenue from the sale of products, and we do not expect to generate revenue from the sale of our product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever.

Our net losses were $ 108 .

4 million and $ 62.6 million for the six months ended June 30 , 2020 and 2019, respectively.

As of June 30 , 20 20 , we had an accumulated deficit of $ 476 .

Our net losses were $193.0 million and $110.9 million for the nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, we had an accumulated deficit of $561.5 million.

Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, manufacturing and in-licensing our technology platforms and product candidates, and conducting preclinical studies and early clinical trials, and to a lesser extent, general and administrative expenditures.

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Material for Phase 3 clinical trials and commercial supply will require large-volume, low-cost-of-goods production.

For example, we and our partner have recently executed a number of collaboration agreements with additional large-scale CDMOs to plan for future scale-up and capacity, particularly to support development and potential commercialization.

For example, we and our partner have executed a number of collaboration agreements with additional large-scale CDMOs to plan for future scale-up and capacity, particularly to support development and potential commercialization.

Recent SARS-CoV-2 Activities

Since February 2020, we have entered into a number of collaboration agreements to accelerate the development, manufacture, and potential commercialization of therapies to treat and prevent SARS-CoV-2 and other coronaviruses.

We have also made substantial efforts to protect our intellectual property in this area, as evidenced by our recent expansion of our patent portfolio.

We have also made substantial efforts to protect our intellectual property in this area, as evidenced by the expansion of our patent portfolio.

Development and Commercialization

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The initial antibodies under the Antibody Program are VIR-7831 and VIR-7832, which have demonstrated high affinity for the SARS-CoV-2 spike protein and are highly potent in neutralizing SARS-CoV-2 in live-virus cellular assays.

In March and April 2020, we entered into two further amendments to our collaboration and license agreement with Alnylam Pharmaceuticals, Inc., or Alnylam, to expand our existing collaboration of five infectious disease targets to nine, including one targeting SARS-CoV-2 and potentially other coronaviruses, and up to three targeting human host factors for SARS-CoV-2.

I n March and April 2020 , we entered into two further amendments to our collaboration and license agreement with Alnylam to expand our existing collaboration of five infectious disease targets to nine, including one targeting SARS-CoV-2 and potentially other coronaviruses, and up to three targeting human host factors for SARS-CoV-2.

Manufacturing

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We continue to closely monitor the COVID-19 situation and will evolve our plans and policies as needed going forward.

In March 2020, some of our workforce transitioned to working remotely.

We have recently implemented plans to reopen our offices to allow employees to return when appropriate.

These plans are based on a phased approach consistent with local government requirements, and focused on employee safety, and contemplate returning to remote work should new restrictions be implemented.

As a result of these developments, in March 2020, we implemented work-from-home policies for most of our employees.

We have also implemented plans to reopen our offices to allow employees to return when appropriate.

Although these plans are based on a phased approach consistent with local government requirements, and focused on employee safety, and contemplate returning to remote work should new restrictions be implemented, there is uncertainty regarding recent phased reopening, which may be rolled back, and restrictions re-implemented.

We are also working to provide our employees with the support they need to ensure continuity of business operations.

We are working closely with our CDMOs to manage our supply chain activities and mitigate any potential disruptions to our clinical trial supplies as a result of the COVID-19 pandemic.

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For some of our clinical development programs, we are experiencing, and may continue to experience, a disruption or delay in our ability to initiate trial sites and enroll and assess patients.

For example, the initiation of the Phase 1 trial for VIR-1111 and Phase 2 trial for VIR-2482, which were delayed due to the impact of COVID-19, are now expected in the fourth quarter of 2020 and fourth quarter of 2021, respectively.

In addition, we rely on contract research organizations or other third parties to assist us with clinical trials, and we cannot guarantee that they will continue to perform their contractual duties in a timely and satisfactory manner as a result of the COVID-19 pandemic.

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Research and development expenses consist primarily of costs incurred for the development of our product candidates, which include:

expenses related to license and collaboration agreements;

expenses related to license and collaboration agreements, and contingent consideration from business acquisitions;

personnel-related expenses, including salaries, benefits and stock-based compensation for personnel contributing to research and development activities;

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R esults of Operations

Comparison of the Three and Six Months Ended June 30, 2020 and 2019

Comparison of the Three and Nine Months Ended September 30, 2020 and 2019

The following table summarizes our results of operations for the periods presented:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands)

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Total other income (expense)

Loss before provision for income taxes

Provision for income taxes

Total revenue was $67.0 million and $2.0 million for the three months ended June 30, 2020 and 2019, respectively, and $72.7 million and $5.7 million for the six months ended June 30, 2020 and 2019, respectively.

The increase in total revenue was primarily due to $43.3 million of revenue related to the license granted to GSK under our collaboration agreement, and $22.7 million of revenue related to Brii Biosciences Offshore Limited’s, or Brii Bio’s, exercise of its option to obtain exclusive rights to develop and commercialize compounds arising from VIR-2218 in greater China.

For the three months ended June 30, 2020, the decrease in grant revenue was due to the timing of research activities under the HIV and TB grants with the Bill & Melinda Gates Foundation.

Loss before benefit from (provision for) income taxes

Benefit from (provision for) income taxes

Total revenue was $1.9 million and $1.4 million for the three months ended September 30, 2020 and 2019, respectively, and $74.6 million and $7.1 million for the nine months ended September 30, 2020 and 2019, respectively.

The increase in total revenue for the three months ended September 30, 2020 was primarily due to the timing of research activities under the HIV and TB grants with the Bill & Melinda Gates Foundation.

The increase in total revenue for the nine months ended September 30, 2020 was primarily due to $43.3 million of revenue related to the license granted to GSK under our collaboration agreement, and $22.7 million of revenue related to Brii Biosciences Offshore Limited’s, or Brii Bio’s, exercise of its option to obtain exclusive rights to develop and commercialize compounds arising from VIR-2218 in greater China.

Research and Development Expenses

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(in thousands)

Licenses and collaborations

Licenses, collaborations and contingent consideration

Contract manufacturing

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Total research and development expenses

Comparison of three months ended June 30, 2020 and 2019

Research and development expenses were $79.7 million and $29.8 million for the three months ended June 30, 2020 and 2019, respectively.

Comparison of three months ended September 30, 2020 and 2019

Research and development expenses were $70.7 million and $39.9 million for the three months ended September 30, 2020 and 2019, respectively.

This increase was primarily due to the following factors:

licenses and collaboration expenses increased by $26.7 million, which was primarily attributable to increases of $18.4 million related to the change in fair value of the contingent consideration from our acquisition of Humabs Biomed SA, or Humabs, $10.0 million payment to Alnylam resulting from Brii Bio’s exercise of its option for VIR-2218, and $0.6 million in development milestone payments under third-party license agreements, partially offset by a $3.8 million reimbursement of costs pursuant to our collaboration with GSK;

contract manufacturing expense increased by $13.7 million, which was primarily attributable to an increase of $17.2 million related to initiation of manufacturing activities for our SARS-CoV-2 programs, partially offset by a decrease of $4.0 million related to the manufacturing for HBV and influenza A drug products initiated in the first half of 2018 and completed in the second quarter of 2019;

contract manufacturing expense increased by $8.7 million, which was primarily attributable to an increase of $8.2 million related to initiation of manufacturing activities and process development for our SARS-CoV-2 programs;

licenses, collaboration and contingent consideration expenses increased by $7.9 million, which was primarily attributable to increases of $18.8 million related to the change in fair value of the contingent consideration from our acquisition of Humabs Biomed SA, or Humabs, and $1.2 million in costs under our collaboration with GSK, partially offset by $5.7 million decrease in costs incurred under our collaboration agreement with Alnylam, $5.0 million milestone achieved in the third quarter of 2019 under our 2018 license agreement, or the 2018 MedImmune Agreement, with MedImmune, LLC, and $1.4 million decrease in various license fees and milestone with third parties;

personnel-related expenses increased by $5.6 million, which was primarily attributable to an increase in our headcount;

clinical costs increased $3.1 million, which was primarily attributable to start up activities related to our VIR-7831, VIR-3434 and VIR-1111 clinical trials;

other research and development expenses increased by $2.5 million, which was attributable to increases of $1.0 million in the allocation of facilities costs due to an increase in our headcount, $0.8 million in external research costs due to increased clinical and manufacturing activities, and $0.7 million in supplies and equipment costs to support our programs related to COVID-19.

Comparison of six months ended June 30, 2020 and 2019

Research and development expenses were $144.6 million and $55.7 million for the six months ended June 30, 2020 and 2019, respectively.

other research and development expenses increased by $4.4 million, which was primarily attributable to increases of $2.0 million in external research costs due to increased clinical and manufacturing activities, and $1.0 million in supplies and equipment costs to support our programs related to COVID-19;

clinical costs increased $4.3 million, which was primarily attributable to activities related to our VIR-7831, VIR-1111 and VIR-3434 clinical trials.

Comparison of nine months ended September 30, 2020 and 2019

Research and development expenses were $215.3 million and $95.5 million for the nine months ended September 30, 2020 and 2019, respectively.

This increase was primarily due to the following factors:

licenses and collaboration expenses increased by $59.2 million, which primarily attributable to increases of $31.8 million on achievement of the first development milestone related to our Alnylam Agreement, $17.7 million related to the change in fair value of the contingent consideration from our acquisition of Humabs, $10.0 million payment to Alnylam resulting from Brii Bio's exercise of its option for VIR-2218, and $0.6 million in development milestone payments under third-party license agreements, partially offset by a $3.8 million reimbursement of costs pursuant to our collaboration with GSK;

licenses, collaboration and contingent consideration expenses increased by $67.8 million, which primarily attributable to increases of $36.9 million related to the change in fair value of the contingent consideration from our acquisition of Humabs, $31.8 million on achievement of the first development milestone related to our Alnylam Agreement, and $10.0 million payment to Alnylam resulting from Brii Bio's exercise of its option for VIR-2218, partially offset by $5.0 million milestone achieved in the third quarter of 2019 under our 2018 MedImmune Agreement, $2.6 million reimbursement of costs pursuant to our collaboration with GSK and $2.3 million decrease in costs incurred under our collaboration agreement with Alnylam;

contract manufacturing expense increased by $17.5 million, which was primarily attributable to an increase of $27.0 million related to initiation of manufacturing activities and process development for our SARS-CoV-2 programs, partially offset by a decrease of $9.0 million related to the manufacturing for HBV, HIV and influenza A drug products initiated in 2018 and completed in the first half of 2019;

personnel-related expenses increased by $14.6 million, which was primarily attributable to an increase in our headcount;

contract manufacturing expense increased by $8.9 million, which was primarily attributable to an increase of $17.2 million related to initiation of manufacturing activities for our SARS-CoV-2 programs, partially offset by a decrease of $8.8 million related to the manufacturing for HBV, HIV and influenza A drug products initiated in 2018 and completed in the first half of 2019;

other research and development expenses increased by $6.5 million, which was attributable to increases of $2.4 million in supplies and equipment costs to support our programs related to COVID-19, $2.2 million in external research costs due to increased clinical and manufacturing activities, and $1.9 million in the allocation of facilities costs due to an increase in our headcount;

clinical costs increased by $5.3 million, which was primarily attributable to our influenza A clinical trial, which started in late 2019, and start up activities related to our VIR-7831, VIR-1111 and VIR-3434 clinical trials.

other research and development expenses increased by $10.9 million, which was primarily attributable to increases of $4.0 million in external research costs due to increased clinical and manufacturing activities, $3.3 million in supplies and equipment costs to support our programs related to COVID-19, and $2.7 million in the allocation of facilities costs due to an increase in our headcount;

clinical costs increased by $9.0 million, which was primarily attributable to activities related to our VIR-7831, VIR-1111 and VIR-3434 clinical trials.

General and Administrative Expenses

General and administrative expenses were $16.4 million and $8.0 million for the three months ended June 30, 2020 and 2019, respectively, and $29.0 million and $16.6 million for the six months ended June 30, 2020 and 2019, respectively.

General and administrative expenses were $18.9 million and $9.2 million for the three months ended September 30, 2020 and 2019, respectively, and $47.9 million and $25.8 million for the nine months ended September 30, 2020 and 2019, respectively.

The increase was primarily due to increases in personnel-related expenses related to additional headcount, legal fees, external consulting and other expenses due to costs associated with operating as a public company.

Interest Income

Interest income was $0.8 million and $2.3 million for the three months ended June 30, 2020 and 2019, respectively, and $2.6 million and $4.5 million for the six months ended June 30, 2020 and 2019, respectively.

The decrease was due to lower investment balances in the three and six months ended June 30, 2020 compared to the same periods in 2019.

Interest income was $0.4 million and $2.0 million for the three months ended September 30, 2020 and 2019, respectively, and $2.5 million and $6.6 million for the nine months ended September 30, 2020 and 2019, respectively.

The decrease was primarily due to lower interest rates on investment balances in the three and nine months ended September 30, 2020 compared to the same periods in 2019.

Other Income (Expense), Net

Other expense, net was $2.9 million and $0.4 million for the three months ended June 30, 2020 and 2019, respectively, and $10.0 million and $0.6 million for the six months ended June 30, 2020 and 2019, respectively.

The increase in expense was primarily related to the change in fair value of the contingent consideration related to our acquisition of TomegaVax.

Other income, net was $2.6 million for the three months ended September 30, 2020 compared to other expense, net of $2.7 million for the three months ended September 30, 2019.

Other expense, net was $6.9 million and $3.3 million for the nine months ended September 30, 2020 and 2019, respectively.

The increase in other income or expense was primarily related to the change in fair value of the contingent consideration related to our acquisition of TomegaVax.

Liquidity, Capital Resources and Capital Requirements

Sources of Liquidity

As of June 30, 2020, excluding restricted cash, we had $552.4 million in cash, cash equivalents and short-term investments, and an accumulated deficit of $476.9 million.

As of September 30, 2020, excluding restricted cash, we had $826.6 million in cash, cash equivalents and short-term investments, and an accumulated deficit of $561.5 million.

We have financed our operations primarily through sales of our common stock and convertible preferred securities and payments received under our grant and collaboration agreements.

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Future Funding Requirements

Based upon our current operating plan, we believe that our existing cash, cash equivalents and short-term investments as of June 30, 2020 together with the net proceeds from our July 2020 follow-on offering, will enable us to fund our operations through at least the next 12 months from the issuance date of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned.

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The following table summarizes our cash flows for the periods indicated:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Operating Activities

During the six months ended June 30, 2020, net cash used in operating activities was $59.0 million.

This consisted primarily of a net loss of $108.4 million, an increase in our net operating assets of $2.6 million, and a payment on contingent consideration of $6.5 million related to a milestone achieved related to our Humabs acquisition, partially offset by non-cash charges of $58.5 million.

The change in our net operating assets of $2.6 million was primarily due to a decrease in deferred revenue of $4.0 million related to revenue recognized from the Bill & Melinda Gates Foundation grants, an increase of $2.2 million in prepaid expenses and other current assets related to a receivable under our GSK collaboration agreement, a decrease in operating lease liabilities of $1.6 million due to lease payments, and a decrease in accounts payable of $1.3 million, which was partially offset by an increase in accrued liabilities and other long-term liabilities by $6.8 million due to higher research and development activities.

During the nine months ended September 30, 2020, net cash used in operating activities was $108.9 million.

This consisted primarily of a net loss of $193.0 million and a payment on contingent consideration of $6.5 million related to a milestone achieved related to our Humabs acquisition, partially offset by a decrease in our net operating assets of $3.6 million and non-cash charges of $87.0 million.

The change in our net operating assets of $3.6 million was primarily due to an increase in accrued liabilities and other long-term liabilities by $13.2 million and an increase in accounts payable of $1.0 million due to higher research and development activities, which was partially offset by a decrease in deferred revenue of $5.7 million related to revenue recognized from the Bill & Melinda Gates Foundation grants, and a decrease in operating lease liabilities of $2.3 million due to lease payments.

The non-cash charges of $87.0 million primarily consisted of $44.4 million for revaluation of contingent consideration, $16.8 million for the change in fair value of the derivative liability under the Alnylam Agreement, $17.3 million for stock-based compensation expense, and $3.2 million for depreciation and amortization.

During the six months ended June 30, 2019, net cash used in operating activities was $53.8 million.

During the nine months ended September 30, 2019, net cash used in operating activities was $90.7 million.

This consisted primarily of a net loss of $110.9 million, partially offset by a decrease in our net operating assets of $6.5 million and non-cash charges of $13.7 million.

The decrease in our net operating assets of $2.9 million was primarily due to an increase in deferred revenue of $2.9 million related to upfront payments received from the Bill & Melinda Gates Foundation grants.

The non-cash charges of $5.9 million primarily consisted of $3.9 million for stock-based compensation expense and $1.5 million for depreciation and amortization expense.

The change in our net operating assets of $6.5 million was primarily driven by an increase in accrued liabilities related to expenses incurred under the Alnylam Agreement.

The non-cash charges of $13.7 million primarily consisted of $6.0 million for stock-based compensation expense, $3.4 million for revaluation of convertible preferred stock liability, and $3.4 million for depreciation and amortization expense.

Investing Activities

During the six months ended June 30, 2020, net cash provided by investing activities was $114.8 million.

This consisted primarily of $247.2 million in proceeds received from investments which matured during the period, partially offset by purchases of investments of $129.9 million and purchases of property and equipment of $2.6 million.

During the six months ended June 30, 2019, net cash used in investing activities was $229.7 million.

During the nine months ended September 30, 2020, net cash used in investing activities was $70.6 million.

This consisted primarily of purchases of investments of $363.4 million and purchases of property and equipment of $4.1 million, partially offset by $296.8 million in proceeds received from investments which matured during the period.

During the nine months ended September 30, 2019, net cash used in investing activities was $182.4 million.

This consisted of purchases of short-term investments of $495.9 million and purchases of property and equipment of $7.4 million, partially offset by $320.9 million in proceeds received from short-term investments which matured during the period.

Financing Activities

During the six months ended June 30, 2020, net cash provided by financing activities was $205.4 million.

This consisted primarily of proceeds received from the issuance of our common stock to GSK of $206.7 million in April 2020 and from exercises of stock options of $2.4 million, partially offset by a payment of contingent consideration related to our Humabs acquisition of $3.5 million.

During the six months ended June 30, 2019, net cash provided by financing activities was $317.4 million.

During the nine months ended September 30, 2020, net cash provided by financing activities was $529.7 million.

This consisted primarily of proceeds received from the issuance of our common stock to GSK of $206.7 million in April 2020, the issuance of our common stock related to our follow-on offering of $323.2 million and from exercises of stock options of $3.5 million, partially offset by a payment of contingent consideration related to our Humabs acquisition of $3.5 million.

During the nine months ended September 30, 2019, net cash provided by financing activities was $319.1 million.

This consisted primarily of net proceeds received from the issuance of our Series B convertible preferred stock of $317.3 million in January 2019.

Contractual Obligations and Commitments

Except as discussed in Note 8—Commitments and Contingencies and Note 14—Subsequent Events to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no material changes from the contractual obligations previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

Except as discussed in Note 9—Commitments and Contingencies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no material changes from the contractual obligations previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019.

Off-Balance Sheet Arrangements

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As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

In light of our public float at June 30, 2020, w e expect that we will no longer be an emerging growth company on December 31, 2020.

In light of our public float at June 30, 2020, we expect that we will no longer be an emerging growth company on December 31, 2020.

Critical Accounting Policies and Estimates

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Actual results may differ from these estimates.

Except as noted below and in Note 2 to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no significant changes in our critical accounting policies during the six months ended June 30, 2020, as compared with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 26, 2020.

Except as noted below and in Note 2 to the c ondensed c onsolidated f inancial s tatements included elsewhere in this Quarterly Report on Form 10-Q , there have been no significant changes in our critical accounting policies during the nine months ended September 30, 2020 , as compared with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 , filed with the SEC on March 26 , 20 20.

Revenue Recognition

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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