CEREVEL THERAPEUTICS HOLDINGS, INC. You should read the following discussion and analysis of our financial condition
and results of operations together with our unaudited condensed consolidated
financial statements and notes thereto included elsewhere in this Quarterly
Report, and the audited consolidated financial statements and accompanying
notes, as well as Management's Discussion and Analysis of Financial Condition
and Results of Operations, contained in our Annual Report on Form 10-K for the
year ended
Overview
Introduction
We are a clinical-stage biopharmaceutical company pursuing a targeted approach to neuroscience that combines a deep understanding of disease-related biology and neurocircuitry of the brain with advanced chemistry and central nervous system, or CNS, target receptor selective pharmacology to discover and design new therapies. We seek to transform the lives of patients through the development of new therapies for neuroscience diseases, including schizophrenia, epilepsy and Parkinson's disease. We are advancing our extensive and diverse pipeline with numerous clinical trials underway or planned, including three ongoing Phase 3 trials and an open-label extension trial for tavapadon in Parkinson's, two planned Phase 2 trials and a planned open-label extension trial for emraclidine in schizophrenia and an ongoing Phase 2 proof-of-concept trial with an open-label extension trial for darigabat in focal epilepsy. See "-Our Pipeline" below. We have built a highly experienced team of senior leaders and neuroscience drug developers who combine a nimble, results-driven biotech mindset with the proven expertise of large pharmaceutical company experience and capabilities in drug discovery and development.
Our portfolio of product candidates is based on a differentiated approach to addressing neuroscience diseases, which incorporates three key pillars: (1) targeted neurocircuitry, where we seek to unlock new treatment opportunities by precisely identifying and targeting the neurocircuit that underlies a given neuroscience disease, (2) receptor subtype selectivity, where we selectively target the receptor subtype(s) related to the disease physiology to minimize undesirable off-target effects while maximizing activity and (3) differentiated pharmacology, where we design full and partial agonists, antagonists and allosteric modulators to precisely fine-tune the receptor pharmacology and neurocircuit activity to avoid over-activation or over-suppression of the endogenous physiologic range. In addition, our portfolio is supported by robust data packages and rigorous clinical trial execution designed to elucidate the key points of differentiation for our compounds. We believe that this science-driven approach is critical to achieving optimal therapeutic activity while minimizing unintended side effects of currently available therapies.
Behind our portfolio stands a team with a multi-decade track record of drug approvals and commercial success. This track record has been driven by their extensive experience with empirically-driven clinical trial design and implementation, a history of successful interactions with regulatory agencies and relationships with global key opinion leaders. We believe that the distinctive combination of our management team and our existing pipeline has the potential to bring to patients the next generation of transformative neuroscience therapies.
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Our Pipeline
The following table summarizes our current portfolio of product candidates. This table does not include multiple additional preclinical programs that have not yet been disclosed.
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Our Lead Programs
1.
Emraclidine is a positive allosteric modulator, or PAM, that selectively targets
the muscarinic acetylcholine 4 receptor subtype, or M4. In
2.
Darigabat is a PAM that selectively targets the alpha-2/3/5 subunits of the
GABAA receptor. In the second half of 2020, we initiated a Phase 2
proof-of-concept trial, known as REALIZE, in patients with drug-resistant focal
onset seizures, or focal epilepsy. Data are expected mid-year 2023 for the Phase
2 proof-of-concept trial in focal epilepsy. In
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events and no discontinuations in the darigabat cohorts. We intend to pursue development of darigabat in anxiety-related disorders.
3.
Tavapadon is a selective dopamine D1/D5 receptor partial agonist that we are
developing for the treatment of early- and late-stage Parkinson's disease. We
initiated a registration-directed Phase 3 program for tavapadon beginning in
4.
CVL-871 is a selective dopamine D1/D5 receptor partial agonist specifically designed to achieve a modest level of partial agonism, which we believe may be useful in modulating the complex neural networks that govern cognition, motivation and apathy behaviors in neurodegenerative diseases. In the second quarter of 2021, the FDA granted Fast Track Designation for CVL-871 for the treatment of dementia-related apathy. We are conducting a Phase 2a exploratory trial in dementia-related apathy, with data expected in the first half of 2023.
We believe that our lead programs have target product profiles that may enable them to become backbone therapies in their respective lead indications, either replacing standards of care as monotherapies or enhancing treatment regimens as adjunct to existing therapies. Results from the clinical trials mentioned above will guide the potential development of our product candidates in additional indications with similar neurocircuitry deficits.
Our Other Programs
In addition to the lead programs described above, we plan to further characterize and appropriately advance our early clinical and preclinical pipeline across multiple potential neuroscience indications. Our other programs include:
•
CVL-354, our selective kappa opioid receptor antagonist, or KORA, for the treatment of major depressive disorder, or MDD, and substance use disorder;
•
CVL-047, our selective PDE4 inhibitor (PDE4D-sparing) for the treatment of MDD and schizophrenia;
•
our selective M4 agonist program for the treatment of psychosis and related indications; and
•
our LRRK2 inhibitor program that has the potential to address disease progression in Parkinson's.
We are also pursuing other undisclosed targets, including those with disease-modifying potential for leading neuroscience diseases. These programs include those initiated by Pfizer as well as others developed internally through the application of human genetic analyses and new technology platforms, such as artificial intelligence and DNA-encoded chemical libraries, to establish novel chemical lead series that are designed to enable better understanding of therapeutic potential.
In
Business Environment
The biopharmaceutical industry is extremely competitive. We are subject to risks and uncertainties common to clinical-stage companies in the biopharmaceutical industry. These risks include, but are not limited to, the introduction of new products, therapies, standards of care or technological innovations, our ability to obtain and maintain adequate protection for our in-licensed technology, data or other intellectual property and proprietary rights and compliance with extensive government regulation and oversight. We are also dependent upon the services of key personnel, including our Chief Executive Officer, executive team and other highly skilled employees. Demand for experienced personnel in the pharmaceutical and biotechnology industries is high and competition for talent is intense. Please read the section entitled "Risk Factors" for additional information.
We face potential competition from many different sources, including pharmaceutical and biotechnology companies, academic institutions and governmental agencies, as well as public and private research institutions. Many of our competitors are working to develop or have commercialized products similar to those we are developing and have considerable experience in undertaking clinical trials and in obtaining regulatory approval to market pharmaceutical products. Our competitors may also have significantly greater financial resources, established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products. Other smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
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Risks and Liquidity
Product development is very expensive and involves a high degree of risk. Only a small number of research and development programs result in the commercialization of a product. We will not generate revenue from product sales unless and until we successfully complete clinical development, are able to obtain regulatory approval for and successfully commercialize the product candidates we are developing or may develop. We currently do not have any product candidates approved for commercial sale. In addition, we operate in an environment of rapid change in technology. We are also dependent upon the services of our employees, consultants, third-party contract research organizations, or CROs, third-party contract manufacturing organizations, or CMOs, and other third-party organizations.
Our product candidates, currently under development or that we may develop, will require significant additional research and development efforts, including extensive clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting capabilities. There can be no assurance that our research and development activities will be successfully completed, that adequate protection for our licensed or developed technology will be obtained and maintained, that products developed will obtain necessary regulatory approval or that any approved products will be commercially viable.
We believe that our available financial resources will enable us to fund our operating expense and capital expenditure requirements through at least 12 months from the issuance date of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. Our estimate may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
In the future, we will require additional capital to meet operational needs and
capital requirements. We are eligible to receive up to
We have incurred significant operating losses since our inception and, as of
In addition, we anticipate that our expenses will increase substantially if, and as, we:
•
advance our clinical-stage product candidates through clinical development, including as we advance these candidates into later-stage clinical trials;
•
seek regulatory approvals for any product candidates that successfully complete clinical trials;
•
hire additional clinical, quality control, medical, scientific and other technical personnel to support our clinical operations;
•
experience an increase in headcount as we expand our research and development organization and initiate pre-commercial activities;
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•
undertake any pre-commercial or commercial activities to establish sales, marketing and distribution capabilities;
•
advance our preclinical-stage product candidates into clinical development;
•
seek to identify, acquire and develop additional product candidates, including through business development efforts to invest in or in-license other technologies or product candidates;
•
meet the requirements and demands of being a public company, particularly now that we neither qualify as an "emerging growth company" nor a "smaller reporting company";
•
maintain, expand and protect our intellectual property portfolio;
•
make milestone, royalty or other payments due under the Pfizer License Agreement (as defined herein) and any future in-license or collaboration agreements; and
•
make milestone, royalty or other payments due under the Funding Agreements and any future financing or other arrangements with third parties.
Impact of the Ongoing COVID-19 Pandemic
We are closely monitoring the impact of the ongoing COVID-19 pandemic on all aspects of our business, including how it has impacted and may continue to impact our operations and the operations of our suppliers, vendors and business partners. The extent to which COVID-19 impacts our business, results of operations and financial condition will depend on future developments, which, despite progress in vaccination efforts, are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, new information that may emerge concerning the severity of COVID-19, such as new variants, which may impact rates of infection and vaccination efforts, developments or perceptions regarding the safety of vaccines and the extent and effectiveness of actions to contain COVID-19 or treat its impact, including vaccination campaigns and lockdown measures, among others. In addition, recurrences or additional waves of COVID-19 cases could cause other widespread or more severe impacts depending on where infection rates are highest. We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage were to experience prolonged business shutdowns or other disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively affected, which could have a material adverse impact on our business, results of operations and financial condition.
We have not incurred any significant impairment losses in the carrying values of our assets as a result of the pandemic and we are not aware of any specific related event or circumstance that would require us to revise our estimates. Our estimates of the impact on our business may change based on new information that may emerge concerning COVID-19 and the actions to contain it or treat its impact and the economic impact on local, regional, national and international markets.
Components of Operating Results
Revenues
We have not generated any revenues since our inception and do not expect to generate any revenues from the sale of products in the near future, if at all. If our development efforts for our current product candidates or additional product candidates that we may develop in the future are successful and can be commercialized, we may generate revenue in the future from product sales. Additionally, we may enter into collaboration and license agreements from time to time that provide for certain payments due to us. Accordingly, we may generate revenue from payments from such collaboration or license agreements in the future.
Research and Development
We support our drug discovery and development efforts through the commitment of significant resources to our preclinical and clinical development activities. Our research and development expense includes:
•
employee-related expenses, consisting of salaries, benefits and equity-based compensation for personnel engaged in our research and development activities;
•
expenses incurred in connection with the preclinical and clinical development of our product candidates, including costs incurred under agreements with CROs, investigative clinical trial sites and consultants and other third-party organizations that conduct research and development activities on our behalf;
•
costs associated with preclinical studies and clinical trials, including research materials;
•
materials and supply costs associated with the manufacture of drug substance and drug product for preclinical testing and clinical trials; and
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•
certain indirect costs incurred in support of overall research and development activities, including facilities, depreciation and technology expenses.
We expense research and development expenses as incurred. Payments we make for research and development services prior to the services being rendered are recorded as prepaid assets in our consolidated balance sheets and are expensed as the services are provided. We estimate and accrue the value of goods and services received from CROs, CMOs and other third parties each reporting period based on estimates of the level of services performed and progress in the period when we have not received an invoice from such organizations. When evaluating the adequacy of accrued liabilities, we analyze progress of the studies or clinical trials, including the phase of completion of events, invoices received and contracted costs. We reassess and adjust our accruals as actual costs become known or as additional information becomes available. Our historical accrued estimates have not been materially different from actual costs.
Our external research and development expenses for our clinical stage product candidates are tracked on a program-by-program basis and consist primarily of fees, reimbursed materials and other costs paid to consultants, contractors, CROs and CMOs. External research and developments costs that directly support our discovery activities and preclinical programs are classified within other research and development programs. Program costs for the periods presented do not reflect an allocation of expenses associated with personnel costs, equity-based compensation expense, activities that benefit multiple programs or indirect costs incurred in support of overall research and development, such as technology and facilities-related costs.
We expect our research and development expenses will increase substantially in connection with our planned preclinical and clinical development activities both in the near-term and beyond as we continue to invest in activities to develop our product candidates and preclinical programs and as certain product candidates advance into later stages of development. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size, scope and duration of later-stage clinical trials. Furthermore, the process of conducting the necessary clinical trials to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we cannot accurately estimate or know the nature, timing and costs that will be necessary to complete the preclinical and clinical development for any of our product candidates or when and to what extent we may generate revenue from the commercialization and sale of any of our product candidates or achieve profitability.
The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors that include:
•
per patient trial costs;
•
the number of patients that participate in the trials;
•
the number of sites included in the trials;
•
the countries in which the trials are conducted;
•
the length of time required to enroll eligible patients;
•
the number of doses that patients receive;
•
the drop-out or discontinuation rates of patients;
•
potential additional safety monitoring or other studies requested by regulatory agencies;
•
the duration of patient follow-up; and
•
the efficacy and safety profile of our product candidates.
Changes in any of these assumptions could significantly impact the cost and timing associated with the development of our product candidates. Additionally, future competition and commercial and regulatory factors beyond our control may also impact our clinical development programs and plans.
General and Administrative
We expense general and administrative costs as incurred. General and administrative expenses consist primarily of salaries, benefits and equity-based compensation for personnel in executive, finance, human resources, legal and other corporate functions. General and administrative expenses also include legal fees incurred relating to corporate and patent matters, professional fees incurred for auditing, consulting services, market research and commercial planning activities, and insurance costs, facilities-related costs and depreciation expenses.
We estimate and accrue for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from our service providers. We reassess and adjust our accruals as actual costs become known or as additional information becomes available.
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We expect our general and administrative expenses will increase both in the near-term and beyond as we continue to build general corporate infrastructure to support the growth of our organization as we expand our research and development organization and initiate pre-commercial activities.
Interest Income, Net
Interest income, net primarily consists of interest earned on our cash, cash equivalents, marketable securities and restricted cash.
Other Income (Expense), Net
Other income (expense), net primarily consists of gains (losses) on the fair
value remeasurement of our financing liabilities and gains (losses) on the fair
value remeasurement of the private placement warrants through their cashless
exercise and settlement in
As permitted under ASC 825, Financial Instruments, we elected the Fair Value Option for our financing liabilities, wherein the financial instruments were initially measured at their issue-date estimated fair value and are subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. Changes in the fair value of our financing liabilities, excluding the impact of the change in fair value attributable to instrument-specific credit risk, are separately presented as a component of other income (expense), net in our consolidated statements of operations and comprehensive loss. The portion of the fair value adjustment attributed to a change in the instrument-specific credit risk is recognized and separately presented as a component of other comprehensive income (loss). Changes in the fair value of our financing liabilities can result from changes to one or multiple inputs, including adjustments to discount rates, changes in the expected achievement or timing of any sales-based, development and regulatory milestones, changes in the amount or timing of expected net cash flows, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval.
The private placement warrants were determined to be free-standing financial
instruments that were reclassified from equity to other long-term liabilities on
Significant judgment is employed in determining the appropriateness of the assumptions underlying the initial fair value determination for each of these instruments and for each subsequent period.
Income Tax Benefit (Provision), Net
To date, we have not recorded any significant amounts related to income tax expense, we have not recognized any reserves related to uncertain tax positions, nor have we recorded any income tax benefits for net operating losses incurred to date or for our research and development tax credits.
We account for income taxes using the asset and liability method, which requires
the recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in our consolidated financial
statements or our tax returns. Deferred tax assets and liabilities are
determined based on difference between the financial statement carrying amounts
and tax bases of existing assets and liabilities and for loss and credit
carryforwards, which are measured using the enacted tax rates and laws in effect
in the years in which the differences are expected to reverse. The realization
of our deferred tax assets is dependent upon the generation of future taxable
income, the amount and timing of which are uncertain. Valuation allowances are
provided, if, based upon the weight of available evidence, it is more likely
than not that some or all of the deferred tax assets will not be realized. As of
We file income tax returns in the
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Results of Operations
The following table summarizes our results of operations:
For the Three Months Ended
March 31,
(In thousands) 2022 2021 Change
Operating expenses:
Research and development $ 55,023 $ 36,561 50 %
General and administrative 17,507 14,010 25 %
Total operating expenses 72,530 50,571 43 %
Loss from operations (72,530 ) (50,571 ) 43 %
Interest income, net 295 15 1867 %
Other income (expense), net 3,941 (425 ) **
Loss before income taxes (68,294 ) (50,981 ) 34 %
Income tax benefit (provision), net - - -
Net loss $ (68,294 ) $ (50,981 ) 34 %
** - Not meaningful
Research and Development
The following table summarizes the components of research and development
expense:
For the Three Months Ended
March 31,
(In thousands) 2022 2021 Change
Tavapadon $ 12,449 $ 10,871 15 %
Emraclidine 9,673 7,115 36 %
Darigabat 5,411 5,065 7 %
CVL-871 880 1,167 (25 )%
Other research and development programs 5,966 2,166 175 %
Unallocated 4,427 1,752 153 %
Personnel costs 12,211 6,628 84 %
Equity-based compensation 4,006 1,797 123 %
Total research and development $ 55,023 $ 36,561 50 %
For the three months ended
For the three months ended
General and Administrative
For the Three Months Ended
March 31,
(In thousands) 2022 2021 Change
General and administrative $ 17,507 $ 14,010 25 %
For the three months ended
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Interest Income, Net
For the Three Months Ended
March 31,
(In thousands) 2022 2021 Change
Interest income, net $ 295 $ 15 1867 %
Interest income, net primarily consists of interest earned on our cash, cash
equivalents, marketable securities and restricted cash. For the three months
ended
Other Income (Expense), Net
The following table summarizes other income (expense), net:
For the Three Months Ended
March 31,
(In thousands) 2022 2021 Change
Gain on fair value remeasurement of financing
liability, related party $ 1,970 $ - **
Gain on fair value remeasurement of financing
liability 1,970 - **
Loss on fair value remeasurement of private
placement warrants - (424 ) **
Other, net 1 (1 ) **
Other income (expense), net $ 3,941 $ (425 ) **
** - Not meaningful
For the three months ended
For the three months ended
For additional information related to the fair value of our financing liabilities associated with the Funding Agreements, please read Note 5, Financing Liabilities, and Note 6, Fair Value Measurements, to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. For additional information on our private placement warrants, please read Note 8, Stockholders' Equity, to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
Liquidity and Capital Resources
Sources of Liquidity and Capital
We have incurred significant operating losses since our inception, and we expect
to continue to incur significant and increasing expenses and operating losses
for the foreseeable future. Our net losses totaled
Our cash, cash equivalents and marketable securities totaled
On
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Upon closing of the Business Combination,
Upon the consummation of the Business Combination, there were 4,983,314 public
warrants and 166,333 private placement warrants, or collectively, the warrants,
outstanding. Each outstanding warrant of ARYA became one warrant to purchase one
share of our common stock. Each whole warrant entitled the holder to purchase
one share of our common stock at an exercise price of
On
On
On
Future Funding Requirements
Our primary use of cash is to fund operating expenses, primarily related to our research and development activities. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.
We have incurred significant operating expenses since our inception, and we expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future.
Our future funding requirements will depend on many factors, including:
•
the scope, progress, results and costs of researching and developing our current product candidates, as well as other additional product candidates we may develop and pursue in the future;
•
the timing of, and the costs involved in, obtaining marketing approvals for our product candidates and any other additional product candidates we may develop and pursue in the future;
•
the number of future product candidates that we may pursue and their development requirements;
•
subject to receipt of regulatory approval, the costs of commercialization activities for our product candidates, to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;
•
subject to receipt of regulatory approval, revenue, if any, received from commercial sales of our product candidates or any other additional product candidates we may develop and pursue in the future;
•
the achievement of milestones that trigger payments under the Pfizer License Agreement and the Funding Agreements;
•
the royalty payments due under the Pfizer License Agreement and the Funding Agreements;
•
the extent to which we in-license or acquire rights to other products, product candidates or technologies;
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•
our ability to establish collaboration arrangements for the development of our product candidates on favorable terms, if at all;
•
our receipt of additional funding under the Funding Agreements;
•
our headcount growth and associated costs as we expand our research and development and initiate pre-commercial activities;
•
the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and
•
the costs of operating as a public company.
Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the total amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials and preclinical studies.
Our expectations with respect to our ability to fund current planned operations is based on estimates that are subject to risks and uncertainties. Our operating plan may change as a result of many factors currently unknown to us and there can be no assurance that the current operating plan will be achieved in the time frame anticipated by us, and we may need to seek additional funds sooner than planned.
For additional information on risks associated with our substantial capital requirements, please read the sections entitled "-Risks and Liquidity" and "Risk Factors" included elsewhere in this Quarterly Report.
Working Capital
The following table summarizes our total working capital, defined as current assets less current liabilities:
As of
March 31, December 31,
(In thousands) 2022 2021 Change
Current assets $ 553,550 $ 578,017 (4 )%
Current liabilities (35,318 ) (42,538 ) (17 )%
Total working capital $ 518,232 $ 535,479 (3 )%
The decrease in working capital at
The net decrease in total current assets was primarily driven by cash used in operations and for purchases of property and equipment as discussed in further detail below, partially offset by the reclassification of certain marketable securities from non-current to current assets based on maturity.
The net decrease in current liabilities was primarily due to a reduction in accrued expenses and other liabilities, as discussed in further detail below, and a decrease in accounts payable.
Cash Flows
The following table summarizes our sources and uses of cash:
For the Three Months Ended
March 31,
(In thousands) 2022 2021 Change
Net cash flows used in operating activities $ (67,648 ) $ (36,418 ) 86 %
Net cash flows used in investing activities (38,542 ) (4,660 ) 727 %
Net cash flows provided by financing
activities 2,603 742 251 %
Net decrease in cash, cash equivalents and
restricted cash $ (103,587 ) $ (40,336 ) 157 %
Cash Flows Used in Operating Activities
Net cash flows used in operating activities represent the cash receipts and disbursements related to all of our activities other than investing and financing activities. We expect cash provided by financing activities will continue to be our primary source of funds to finance operating needs and capital expenditures for the foreseeable future.
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Net cash flows used in operating activities is derived by adjusting our net loss for:
•
non-cash operating items such as depreciation and amortization, adjustments to operating lease expense, equity-based compensation and amortization of premiums and accretion of discounts on marketable securities;
•
changes in operating assets and liabilities reflecting timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations; and
•
changes in the fair value remeasurement of our financing liabilities and private placement warrants.
For the three months ended
For the three months ended
Cash Flows Used in Investing Activities
For the three months ended
For the three months ended
Cash Flows Provided by Financing Activities
For the three months ended
For the three months ended
Contractual Obligations and Other Commitments
Our contractual obligations primarily consist of our obligations under
non-cancellable operating leases, contracts and other purchase obligations. We
did not have any debt obligations as of
Our most significant contracts relate to agreements with CROs for clinical
trials and preclinical studies, CMOs and other service providers for operating
purposes, which we enter into in the normal course of business. These contracts
are generally cancelable at any time by us following a certain period after
notice and therefore, we believe that our non-cancelable obligations under these
agreements are not material. In addition, we have obligations with respect to
potential future royalties payable, contingent development, regulatory and
commercial milestone payments and potential amounts related to uncertain tax
positions. The timing and amount of such obligations are unknown or uncertain as
of
Pfizer License Agreement
In
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Under the Pfizer License Agreement, we are solely responsible for the development, manufacture, regulatory approval and commercialization of compounds and products in the field and we will pay Pfizer tiered royalties on the aggregate net sales during each calendar year, determined on a product-by-product basis, with respect to products under the Pfizer License Agreement, and we may pay potential milestone payments to Pfizer, based on the successful achievement of certain regulatory and commercial milestones. To date, no regulatory or commercial approval milestone payments or royalty payments have been made or become due under this agreement.
For additional information on our Pfizer License Agreement, please read Note 4, Pfizer License Agreement, to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
Funding Agreements
On
For additional information related to our Funding Agreements, please read Note 5, Financing Liabilities, to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
Management Agreement
In connection with the Business Combination, we entered into a management
agreement with
As of
Tax Related Obligations
To date, we have not recognized any reserves related to uncertain tax positions.
As of
Off-balance sheet arrangements
We have not entered into any off-balance sheet arrangements and do not have holdings in any variable interest entities.
Critical Accounting Policies and Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our unaudited condensed consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in
The preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our most critical accounting policies and estimates are described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in our Annual Report, and a discussion of some of the significant estimates and assumptions made in our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report is set forth in Note 3, Summary of Significant Accounting Policies, to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. There have been no material changes to our critical accounting policies and estimates described in our Annual Report.
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Recent Accounting Pronouncements
For a discussion of new accounting standards and their expected impact on our consolidated financial statements or disclosures, please read Note 3, Recent Accounting Guidance, to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
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