APPLIED THERAPEUTICS, INC. The following information should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in the Annual Report. In addition, this discussion and analysis contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described under "Special Note Regarding Forward-Looking Statements" and under "Item 1A. Risk Factors" in this report, and in other reports we file with theSEC , that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a clinical-stage biopharmaceutical company developing a pipeline of novel
product candidates against validated molecular targets in indications of high
unmet medical need. We focus on molecules and pathways whose role in the disease
process is well known based on prior research, but have previously failed to
yield successful products due to poor efficacy and tolerability. Our unique
approach to drug development leverages recent technological advances to design
improved drugs, employs early use of biomarkers to confirm biological activity
and focuses on abbreviated regulatory pathways. Our first molecular target is
aldose reductase, or AR, an enzyme that converts glucose to sorbitol under
oxidative stress conditions, and is implicated in multiple diseases. Prior
attempts to inhibit this enzyme were hindered by nonselective, nonspecific
inhibition, which resulted in limited efficacy and significant off-target safety
effects. The detrimental consequences of AR activation have been well
established by decades of prior research. Our AR program currently includes
three small molecules, which are all potent and selective inhibitors of AR, but
are engineered to have unique tissue permeability profiles to target different
disease states, including diabetic complications, heart disease and rare
metabolic diseases. Using similar strategies to our ARI program, we have also
developed a program targeting selective inhibition of phosphatidylinositol
3-kinase, or PI3K, subunits, which has produced an early-stage oncology
pipeline. The result of this unique multifaceted approach to drug development is
a portfolio of highly specific and selective product candidates that we believe
are significantly de-risked and can move quickly through the development
process.
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AT-007 is a novel central nervous system, or CNS, penetrant ARI that we are developing for the treatment of rare metabolic diseases, including Galactosemia, a devastating rare pediatric metabolic disease that affects how the body processes a simple sugar called galactose, and for which there is no known cure or approved treatment available. TheU.S. Food and Drug Administration , or FDA, has granted both orphan drug designation and rare pediatric disease designation to AT-007 for the treatment of Galactosemia and inJune 2021 , the FDA granted Fast Track Designation to AT-007 for the treatment of Galactosemia. We have completed an adult study in healthy volunteers and Galactosemia patients, demonstrating that AT-007 is safe and well tolerated, and significantly reduces plasma galactitol levels vs. placebo. Galactitol is a toxic metabolite of galactose, which is formed in Galactosemia patients by aberrant activity of aldose reductase when galactose is present at high levels. A pediatric study is underway in children with Galactosemia, assessing the impact of AT-007 vs. placebo on safety, biomarker reduction of galactitol, and long-term functional outcomes. OnApril 13, 2021 , we presented data featuring a cross-sectional analysis of nineteen pediatric patients with Classic Galactosemia, providing meaningful insight on the progressive worsening of the central nervous system phenotype with age. OnOctober 18, 2021 , we reported biomarker data from the pediatric ACTION-Galactosemia Kids study. The results demonstrate a substantial reduction in plasma galactitol of approximately 40%, which was statistically significant (p<0.001) vs. placebo. We previously reported a baseline analysis of the 47 children enrolled in the study which demonstrated a clear correlation between baseline galactitol levels and baseline clinical functional outcomes. The long-term functional outcomes portion of the pediatric study is ongoing, and the outcomes are assessed every 6 months by a fire-walled data monitoring committee (DMC). When the study reaches statistical significance in the active treated arm vs. the placebo arm, the DMC will alert the Company and the trial will be unblinded. Statistical modelling suggests that this should occur at approximately the 18-month outcome assessment, based on currently available predictive information. InApril 2022 , the Company met with the FDA to discuss the design of the ongoing pediatric study prior to the first 6-month outcomes assessment by the DMC. The FDA confirmed that the pediatric study as it is currently designed would support an NDA submission if statistical significance is reached, and there is alignment between the FDA and the Company on the potential path forward to approval. The 6-month clinical outcomes were assessed by the fire-walled DMC, and as expected the data did not yet reach statistical significance. The DMC determined that the safety/benefit profile supported continuing the study. The next DMC evaluation will be following completion of the 12-month clinical outcomes assessments. AT-007 is also being studied in a rare disease caused by Sorbitol Dehydrogenase deficiency, called SORD deficiency. Aldose Reductase is the first enzyme in the polyol pathway, converting glucose to sorbitol. AR is then followed by Sorbitol Dehydrogenase, which converts sorbitol to fructose. Patients with SORD deficiency accumulate very high levels of sorbitol in their cells and tissues as a result of the enzyme deficiency, which results in tissue toxicities such as peripheral neuropathy and motor neuron disease. Recent research in drosophila and cell models of SORD deficiency demonstrated that treatment with an ARI that blocks sorbitol production may provide benefit in this disease. Preclinical studies on AT-007 have demonstrated significant reduction in sorbitol levels in fibroblasts from SORD deficient patients. Treatment with AT-007 in the drosophila model of SORD prevented the disease phenotype and protected from neuronal degeneration. OnOctober 25, 2021 , we reported data from a pilot open-label study in 8 SORD Deficiency patients. AT-007 reduced blood sorbitol levels by approximately 66% from baseline through 30 days of treatment. AT-007 was safe and well tolerated in all treated patients. InDecember 2021 , we initiated a Phase 2/3 registrational study in patients with SORD Deficiency, which will take place at multiple clinical sites in the US andEurope . We are in the process of discussing regulatory requirements for approval in SORD deficiency and plan to advance AT-007 towards registration for this indication. We also plan to initiate a clinical development program on AT-007 in another pediatric rare disease, called PMM2-CDG. PMM2-CDG is a glycosylation disorder caused by deficiencies in the enzyme phosphomannomutase 2, which leads to CNS symptoms similar to galactosemia, including low IQ, tremor, and speech and motor problems. Aldose Reductase is over-activated in this disease as a compensatory consequence of PMM2 deficiency, and a CNS penetrant ARI may be a compelling clinical option. Initial data in fibroblast cell lines derived from PMM2-CDG patients demonstrates that AT-007 treatment increases phosphomannomutase 2 activity. The FDA has granted pediatric rare disease designation and orphan designation for AT-007 in PMM2-CDG. 25
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AT-001 is a novel ARI with broad systemic exposure and peripheral nerve permeability that we are developing for the treatment of diabetic cardiomyopathy, or DbCM, a fatal fibrosis of the heart, for which no treatments are available. We completed a Phase 1/2 clinical trial evaluating AT-001 in approximately 120 patients with type 2 diabetes, in which no drug-related adverse effects or tolerability issues were observed. InSeptember 2019 , we announced the initiation of a Phase 3 registrational trial of AT-001 in DbCM. The study, called ARISE-HF, is designed to evaluate AT-001's ability to improve or prevent the decline of functional capacity in patients with DbCM at high risk of progression to overt heart failure. Although we did experience enrollment delays in 2020 associated with the Covid-19 pandemic, modifications were made to the trial to include additional sites and geographies to address Covid-19-related issues. AT-003 is a novel ARI designed to cross through the back of the eye when dosed orally, and has demonstrated strong retinal penetrance, for the treatment of diabetic retinopathy, or DR. DR is an ophthalmic disease that occurs in diabetic patients and for which treatments are currently limited to high-cost biologics requiring intravitreal administration. DR has been linked to AR activity, including elevations in sorbitol and subsequent changes in retinal blood vessels, which distorts vision and leads to permanent blindness.
AT-104 is a dual selective PI3K inhibitor in preclinical development for T Cell
Acute Lymphoblastic Leukemia ("T-ALL"). AT-104 has demonstrated significant
benefit in both in vitro and in vivo models of T-ALL. In
As we advance our product candidates forward in additional indications, such as SORD deficiency, PMM2-CDG and retinopathy, we anticipate potential moderate growth in our clinical development and operations teams to support the additional clinical trials, as well as addition of a medical affairs team to support the late stage indications and preparations for commercialization. Since inception in 2016, our operations have focused on developing our product candidates, organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and conducting clinical trials. We do not have any product candidates approved for sale and have not generated any revenue. We have incurred significant operating losses since inception in 2016. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and commercialization of one or more of our product candidates. Our net loss was$23.1 million for the three months endedMarch 31, 2022 . As ofMarch 31, 2022 , we had an accumulated deficit of$289.4 million . We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future in connection with our ongoing activities. Furthermore, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses. As ofMarch 31, 2022 , we had cash and cash equivalents and short-term investments of$55.7 million .
InFebruary 2021 , we issued and sold 3,000,000 shares of common stock at a public offering price of$23.00 per share, with an additional 450,000 shares sold pursuant to the underwriters' full exercise of their option to purchase additional shares in the February Offering. We received aggregate net proceeds, net of underwriting discounts and commissions and offering costs of$74.4 million .
Components of Our Results of Operations
Revenue
Since inception, we have not generated any revenue and do not expect to generate
any revenue from the sale of products in the near future. If our development
efforts for our product candidates are successful and result in regulatory
approval, or if we enter into collaboration or license agreements with third
parties, we may generate revenue in the future from a combination of product
sales or payments from collaboration or license agreements.
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Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts and the development of our product candidates, and include:
employee-related expenses, including salaries, related benefits and stock-based
? compensation expense for employees engaged in research and development
functions;
? fees paid to consultants for services directly related to our product
development and regulatory efforts;
expenses incurred under agreements with contract research organizations, or
? CROs, as well as contract manufacturing organizations, or CMOs, and consultants
that conduct and provide supplies for our preclinical studies and clinical
trials;
? costs associated with preclinical activities and development activities;
? costs associated with our technology and our intellectual property portfolio;
and
? costs related to compliance with regulatory requirements.
We expense research and development costs as incurred. Costs for external
development activities are recognized based on an evaluation of the progress to
completion of specific tasks using information provided to us by our vendors.
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 financial statements as prepaid or accrued research and
development expenses.
Research and development costs also include costs incurred in connection with
certain licensing arrangements. Before a compound receives regulatory approval,
we record upfront and milestone payments made by us to third parties under
licensing arrangements as expense. Upfront payments are recorded when incurred,
and milestone payments are recorded when the specific milestone has been
achieved. Once a compound receives regulatory approval, we will record any
milestone payments in Identifiable intangible assets, commence amortization and,
unless the asset is determined to have an indefinite life, we amortize the
payments on a straight-line basis over the remaining agreement term or the
expected product life cycle, whichever is shorter.
Research and development activities are central to our business model. We expect
that our research and development expenses will continue to increase for the
foreseeable future as we continue clinical development for our product
candidates and continue to discover and develop additional product candidates.
If any of our product candidates enter into later stages of clinical
development, they will generally have higher development costs than those in
earlier stages of clinical development, primarily due to the increased size and
duration of later-stage clinical trials. Historically, we have incurred research
and development expenses that primarily relate to the development of AT-007,
AT-001 and our ARI program. As we advance our product candidates, we expect to
allocate our direct external research and development costs across each of the
indications or product candidates.
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The following table summarizes our research and development expenses for the
three months ended
Three Months Ended
March 31,
(in thousands) 2022 2021
Product pipeline research and development expenses
AT-001 $ 5,187 $ 8,118
AT-007 6,853 4,401
Personnel-related expenses 1,937 1,092
Stock-based compensation 856 799
Other expenses 197 38Total research and development expenses$ 15,030 $ 14,448
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive, finance, and commercial functions. General and administrative expenses also include professional fees for legal, accounting, auditing, tax and consulting services; travel expenses; and facility-related expenses, which include allocated expenses for rent and maintenance of facilities and other operating costs.
Commercial expenses consist of payroll expense for commercial personnel, as well as marketing, market research, market access, and other focused investments to support launch of drug candidates and generate evidence of commercial potential and value proposition. Commercial expenses are included in general and administrative expenses. We expect that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our continued research and development and potential commercialization of our product candidates. We also expect to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax compliance services; director and officer insurance costs; and investor and public relations costs. Other Income (Expense), Net
Other income (expense), net consists of interest income (expense), net, and
other income (expense), net. Interest income (expense), net consists primarily
of our interest income on our cash and cash equivalents and marketable
securities. Other income (expense), net consists primarily of realized gains and
losses on sales of marketable securities.
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Results of Operations
Three Months Ended
The following table summarizes our results of operations for the three months
ended
(Unaudited)
Three Months Ended
March 31,
(in thousands) 2022 2021
Operating expenses:
Research and development $ 15,030 $ 14,448
General and administrative 8,071 9,751
Total operating expenses 23,101 24,199
Loss from operations (23,101) (24,199)
Other income (expense), net:
Interest income (expense), net 76 76
Other income (expense) (96) (56)
Other income (expense), net (20) 20
Net loss $ (23,121) $ (24,179) Research and Development Expenses
The following table summarizes our research and development expenses for the
three months ended
Three Months Ended
March 31,
(in thousands) 2022 2021 Increase/(Decrease)
Clinical and pre-clinical $ 11,528 $ 6,454 $ 5,074Drug manufacturing and formulation 231 5,820
(5,589)
Personnel expenses 1,937 1,092 845
Stock-based compensation 856 799 57
Regulatory and other 478 283 195
Total research and development expenses
582
Research and development expenses for the three months ended March 31, 2022 were
$15.0 million , compared to $14.4 million for the three months ended March 31,
2021 . For the three months ended March 31, 2022 , the increase of $0.6 million
was primarily related to:
a decrease in drug manufacturing and formulation costs of
? primarily related to the completion and release of AT-001 and AT-007 drug
product batches in the three months ended
an increase in clinical and pre-clinical expense of
? related to the progression of the SORD pivotal trial, progression of the AT-007
ACTION-Galactosemia long-term extension adult study, and progression of the
AT-007 ACTION-Galactosemia Kids pediatric registrational study;
? an increase in personnel expenses of
headcount in support of our clinical program pipeline;
? an increase in regulatory and other expenses of
? an increase in stock-based compensation of
and restricted stock grants.
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General and Administrative Expenses
The following table summarizes our general and administrative expenses for the
three months ended
Three Months Ended
March 31,
(in thousands) 2022 2021 Increase/(Decrease)
Legal and professional fees $ 1,619 $ 1,771 $ (152)
Commercial expenses 1,288 1,932 (644)
Personnel expenses 1,768 1,544 224
Stock-based compensation 1,221 2,182 (961)
Insurance expenses 1,125 1,010 115
Other expenses 1,050 1,312 (262)Total general and administrative expenses$ 8,071 $ 9,751 $ (1,680) General and administrative expenses were$8.1 million for the three months endedMarch 31, 2022 , compared to$9.8 million for the three months endedMarch 31, 2021 . For the three months endedMarch 31, 2022 , the decrease of$1.7 million was primarily related to:
? a decrease in commercial expenses of
spend relating to commercial operations;
? a decrease in other expenses of
other office expenses;
? a decrease in stock-based compensation of
being forfeited during the current period;
? an increase in personnel expenses of
headcount;
? an increase in insurance expenses of
insurance costs; and
? a decrease in legal and professional fees of
legal fees.
Interest Income (Expense), Net
Interest income was$0.1 million for the three months endedMarch 31, 2022 , as compared to$0.1 million for the three months endedMarch 31, 2021 . Interest income from our marketable securities remained relatively consistent period
over period. Other Income (Expense) Other expense was$0.1 million for the three months endedMarch 31, 2022 , compared to$56,000 for the three months endedMarch 31, 2021 . The change was primarily related to the realized loss of$0.1 million related to the sale and or maturities of marketable securities and currency translation losses of$16,000 incurred during the three months endedMarch 31, 2022 , compared to a realized loss of$56,000 on the sale and or maturities of marketable securities during the three months endedMarch 31, 2021 . 30
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Liquidity and Capital Resources
Since our inception throughMarch 31, 2022 , we have not generated any revenue and have incurred significant operating losses and negative cash flows from our operations. The accompanying financial statements have been prepared assuming the continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations. While we believe that our cash and cash equivalents of$55.7 million atMarch 31, 2022 will be sufficient to fund our operations through year end 2022, given our planned expenditures for the next several years, we have concluded and our independent registered public accounting firm has agreed with our conclusion that there is still a substantial doubt regarding our ability to continue as a going concern. Cash Flows The following table summarizes our cash flows for each of the periods presented: Three Months Ended March 31, (in thousands) 2022 2021 Net cash used in operating activities$ (24,410) $
(22,213)
Net cash provided by/(used in) investing activities 9,525 (24,672) Net cash (used in)/provided by financing activities (789) 73,486 Net increase (decrease) in cash and cash equivalents$ (15,674) $ 26,601 Operating Activities
Net cash used in operating activities for the three months endedMarch 31, 2022 , was$24.4 million primarily due to our net losses of$23.1 million , a decrease in operating lease liability of$0.1 million , a decrease in accounts payable of$3.5 million , and a decrease in prepaid expenses of$1.4 million . This is partially offset by increases of$2.1 million in non-cash stock-based compensation expense,$0.1 million in accrued expense,$0.4 million in options issued in lieu of bonus,$1.1 million of amortization of insurance premium, and$0.1 million in amortization of operating lease right-of-use assets. Net cash used in operating activities for the three months endedMarch 31, 2021 , was$22.2 million . For the three months endedMarch 31, 2021 , the increase was primarily due to our net losses of$24.2 million , a decrease in accrued expenses of$3.3 million , an increase in prepaid expenses of$1.6 million , and a decrease in operating lease liability of$0.1 million . This is partially offset by an increase of$2.8 million in accounts payable,$3.0 million in non-cash stock-based compensation expense,$1.0 million of amortization of insurance premium, and$0.1 million in amortization of operating lease right-of-use assets.
Investing Activities
Net cash provided by investing activities for the three months endedMarch 31, 2022 was$9.5 million relating to our purchase of available-for-sale securities for$6.0 million , offset by the proceeds from the maturities of available-for-sale securities of$15.5 million . Net cash used in investing activities for the three months endedMarch 31, 2021 was$24.7 million relating to our purchase of available-for-sale securities for$88.0 million , offset by the proceeds from the sale and maturities of available-for-sale securities of$0.5 million and$62.8 million , respectively.
Financing Activities
During the three months ended
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In
OnJanuary 26, 2022 , the Company entered into the Cowen Equity Distribution Agreement to sell shares of the Company's common stock, from time to time, having an aggregate offering price of up to$100.0 million . Pursuant to the Cowen Equity Distribution Agreement shares of our common stock may be offered and sold through the sales agent in sales deemed "at-the-market" offerings under the Securities Act of 1933, as amended, or the Securities Act. Under the Cowen Equity Distribution Agreement, the sales agent will be entitled to compensation of up to 3% of the gross offering proceeds of all shares of our common stock sold through it pursuant to the Cowen Equity Distribution Agreement. In connection with the sale of shares of our common stock on our behalf, the sales agent may be deemed to be "underwriters" within the meaning of the Securities Act, and the compensation paid to the sales agent may be deemed to be underwriting commissions or discounts. As ofMarch 31, 2022 , the Company has not sold any shares of common stock pursuant to the Cowen Equity Distribution Agreement. During the three months endedMarch 31, 2021 , net cash provided by financing activities was$73.5 million , primarily from the cash proceeds from the February Offering of$74.4 million ,$67,000 from the exercise of stock options for common stock under the 2019 Plan, and$69,000 from the exercise of warrants for common stock. This was partially offset by the payment of short-term borrowings of
$1.1 million . Funding Requirements We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our product candidates. We expect that our expenses will increase significantly if and as we: ? continue the ongoing and planned development of our product candidates;
? initiate, conduct and complete any ongoing, anticipated or future preclinical
studies and clinical trials for our current and future product candidates;
? seek marketing approvals for any product candidates that successfully complete
clinical trials;
establish a sales, marketing, manufacturing and distribution infrastructure to
? commercialize any current or future product candidate for which we may obtain
marketing approval;
? seek to discover and develop additional product candidates;
? continue to build a portfolio of product candidates through the acquisition or
in-license of drugs, product candidates or technologies;
? maintain, protect and expand our intellectual property portfolio;
? hire additional clinical, regulatory and scientific personnel; and
add operational, financial and management information systems and personnel,
? including personnel to support our product development and planned future
commercialization efforts.
Furthermore, we have and expect to continue to incur additional costs associated
with operating as a public company, including significant legal, accounting,
investor relations and other expenses.
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Due to the numerous risks and uncertainties associated with the development of our product candidates and programs, and because the extent to which we may enter into collaborations with third parties for development of our product candidates is unknown, we are unable to estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates. Our future funding requirements, both near and long-term, will depend on many factors, including:
? the initiation, scope, progress, timing, costs and results of our ongoing and
planned clinical trials for our product candidates;
? the outcome, timing and cost of meeting regulatory requirements established by
the FDA and other comparable foreign regulatory authorities;
? the cost of filing, prosecuting, defending and enforcing our patent claims and
other intellectual property rights;
? the cost of defending potential intellectual property disputes, including
patent infringement actions;
the achievement of milestones or occurrence of other developments that trigger
? payments under the Columbia Agreements, the 2020 Miami License Agreement, the
2020 Miami Research Agreement, the 2020 Miami Option Agreement, or other
agreements we may enter into;
? the extent to which we are obligated to reimburse, or entitled to reimbursement
of, clinical trial costs under future collaboration agreements, if any;
? the effect of competing technological and market developments;
? the cost and timing of completion of clinical or commercial-scale manufacturing
activities;
? the costs of operating as a public company;
? the extent to which we in-license or acquire other products and technologies;
? our ability to establish and maintain collaborations on favorable terms, if at
all;
the cost of establishing sales, marketing and distribution capabilities for our
? product candidates in regions where we choose to commercialize our product
candidates, if approved; and
? the initiation, progress, timing and results of the commercialization our
product candidates, if approved, for commercial sale.
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate.
Until such time, if ever, that we can generate product revenue sufficient to
achieve profitability, we expect to finance our cash needs through offerings of
securities, PIPE, debt financings, collaborations or other strategic
transactions. The terms of financing may adversely affect the holdings or the
rights of our stockholders. Funding may not be available to us on acceptable
terms, or at all. If we are unable to obtain funding, we may be required to
delay, limit, reduce or terminate some or all of our research and product
development, product portfolio expansion or future commercialization efforts. If
we raise additional capital through debt financing, we may be subject to
covenants limiting or restricting our ability to take specific actions, such as
incurring additional debt, making capital expenditures or declaring dividends.
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Contractual Obligations and Commitments
The following table summarizes our contractual obligations as ofMarch 31, 2022 : Payments Due By Period Less Than More Than (in thousands) Total 1 Year 1 to 3 Years 4 to 5 Years 5 Years
Operating lease commitments(1)$ 1,322 $ 510 $ 813
$ - $ - Total$ 1,322 $ 510 $ 813 $ - $ -
(1) Represents future minimum lease payments under our operating leases for
office space.
Except as disclosed in the table above, we have no long-term debt or capital leases and no material non-cancelable purchase commitments with service providers, as we have generally contracted on a cancelable, purchase-order basis. We enter into contracts in the normal course of business with CROs, CMOs and other third parties for clinical trials, preclinical research studies and testing and manufacturing services. These contracts are cancelable by us upon prior notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including noncancelable obligations of our service providers, up to the date of cancellation. These payments are not included in the preceding table as the amount and timing of such payments are not known. We may incur potential contingent payments upon our achievement of clinical, regulatory, and commercial milestones, as applicable, or royalty payments that we may be required to make under the 2016 and 2019 Columbia Agreements, the 2020 Miami License Agreement, the 2020 Miami Option Agreement, and the 2020 Miami Research Agreement, pursuant to which we have in-licensed certain intellectual property. Due to the uncertainty of the achievement and timing of the events requiring payment under these agreements, the amounts to be paid by us are not fixed or determinable at this time and are excluded from the table above.
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance withU.S. generally accepted accounting principles, orU.S. GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes to our critical accounting policies from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in the Annual Report.
Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements and do not have any holdings in variable interest entities.
Recently Issued Accounting Pronouncements
Refer to Note 1, in the accompanying notes to our condensed financial statements
appearing elsewhere in this Quarterly Report on Form 10-Q for a discussion of
recent accounting pronouncements.
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Emerging Growth Company Status
The Jumpstart Our Business Startups Act of 2012 permits an "emerging growth company" such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected to "opt out" of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies.
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