CHIMERIX, INC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year endedDecember 31, 2021 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year endedDecember 31, 2021 , filed with theSecurities and Exchange Commission (SEC) onMarch 1, 2022 . Past operating results are not necessarily indicative of results that may occur in future periods. Forward-Looking Statements The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), which are subject to the "safe harbor" created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item IA, "Risk Factors" in this Quarterly Report on Form 10-Q and in our other filings with theSEC . The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements.
OVERVIEW
Chimerix ("Chimerix ," "we," "our," "us" or "the Company") is a biopharmaceutical company whose mission it is to develop medicines that meaningfully improve and extend the lives of patients facing deadly diseases. The Company is focused on developing imipridones as a potential new class of selective cancer therapies. The most advanced imipridone is ONC201 which is in clinical-stage development for H3 K27M-mutant glioma as its lead indication. In addition, imipridone ONC206 is currently in dose escalating clinical trials.
Recent Developments
TEMBEXA (brincidofovir, BCV)
The FDA granted TEMBEXA tablets and oral suspension approval for the treatment of smallpox. TEMBEXA is approved for adult and pediatric patients and is the first and only smallpox therapy approved for neonates. OnMay 16, 2022 , we announced entering into an agreement with Emergent BioSolutions, Inc. (Emergent) for the sale of TEMBEXA worldwide rights for$225 million upfront and additional milestones of up to$100 million to be paid contingent upon the execution of additional procurement awards fromBiomedical Advanced Research and Development Authority (BARDA) following the base period. The closing payment and the milestone payments may be adjusted based on actual procurement value. The Company is also eligible to receive up to$12.5 million in regulatory milestones associated with the SymBio Pharmaceuticals Ltd. brincidofovir partnership to be assumed by Emergent. The Company may also earn a 20% royalty on future gross profit of TEMBEXA inthe United States associated with volumes above 1.7 million treatment courses of therapy during the exclusivity period of TEMBEXA. Outside ofthe United States , the agreement also allowsChimerix to earn a 15% royalty on all gross profit associated with TEMBEXA sales during the exclusivity period of TEMBEXA on a market-to-market basis. Subject to the satisfaction or waiver of the closing conditions, the companies expect the transaction may close as early as the second quarter of 2022. We are currently in negotiation with BARDA on the terms of a TEMBEXA procurement contract. We will continue to lead this negotiation until its conclusion. Entry into a TEMBEXA procurement contract with BARDA is a closing condition to the acquisition agreement with Emergent.
Imipridones - ONC201, ONC206 and ONC212
Imipridones are a potential new class of selective cancer therapies. Clinical trials of ONC201 in glioma patients with the H3 K27M-mutation are underway at several locations in theU.S. ONC201 is an orally administered small molecule dopamine 19 --------------------------------------------------------------------------------
receptor D2 (DRD2) antagonist and caseinolytic protease (ClpP) agonist for the treatment of gliomas that harbor the H3 K27M mutation.
The FDA had previously requested the Company conduct a retrospective Natural Disease History (NDH) study of recurrent H3 K27M-mutant glioma. More recently, we were informed that the FDA no longer expects to rely on the outcome of a NDH study to inform a regulatory decision given the limitations inherent in NDH studies. Therefore, the Company plans to limit further investment in this study and will disclose the findings at a later date. The Company has not yet requested formal feedback on a potential NDA submission for accelerated approval, however, communication from the FDA has made it clear that the potential for accelerated approval is more challenging than previously anticipated. The Company plans to initiate a Phase 3 study of ONC201 in patients who harbor the H3 K27M-mutation. This study is designed to serve as the basis for either a confirmatory approval or first approval. Final study design and protocols are under review. Once agreement has been reached with the FDA, the Company will announce the final clinical design and timeline. While acknowledging the new regulatory sentiment against single-arm data to support accelerated approval, the Company continues work to complete the safety database, clinical pharmacology studies and other items to support a possible regulatory filing for accelerated approval.
ONC201 - Results from 50 Patient Cohort of ONC201 in H3 K27M-mutant Glioma
InNovember 2021 , we reported data from the 50-patient cohort for ONC201 for the treatment of H3 K27M mutant glioma at theSociety for Neuro-Oncology (SNO) Annual Meetings. The BICR of the 50-patient cohort determined an overall response rate (ORR) to be 20.0% (95% Confidence Interval (CI): 10.0-33.7%) as determined by Response Assessment in Neuro-Oncology Criteria for High Grade Gliomas (RANO-HGG). The median duration of response (mDOR) was 11.2 months (95% CI: 3.8 - not reached) and the median time to response (mTTR) was 8.3 months. The proportion of patients achieving either a RANO-HGG and/or RANO-LGG response was 30% (95% CI: 17.9 - 44.6%). One serious adverse event considered possibly ONC201-related by investigator was reported; however, the event was considered unlikely ONC201-related by sponsor assessment.
ONC206 and ONC212
Phase 1 clinical trials for ONC206, our second imipridone product candidate, and IND-enabling work for our third imipridone candidate, ONC212, remain ongoing.
Dociparstat (DSTAT) for First-Line Acute Myeloid Leukemia (AML)
After evaluating a number of options to accelerate the development of DSAT, and considering the evolving standard of care in first-line AML,Chimerix has decided to discontinue the DSTAT program in order to allocate resources to higher-priority oncology programs. OnMay 13, 2022 , the Company provided Cantex with sixty (60) days advance written notification of its intent to terminate the License and Development Agreement related to DSTAT.
CMX521
Chimerix presented a Late Breaking Oral presentation of CMX521 at theInternational Conference of Antiviral Research (ICAR ) onMarch 23, 2022 . Promising preclinical efficacy data generated using an inhaled version of CMX521 as a potential prophylactic and treatment of SARS-CoV-2 (COVID-19) infection was generated through a collaboration betweenChimerix and the Rapidly Emerging Antiviral Drug Development Initiative (READDI) at theUniversity of North Carolina at Chapel Hill (UNC). READDI itself is a global public-private partnership founded at UNC by theUNC Eshelman School of Pharmacy ,UNC School of Medicine ,Gilling School of Global Public Health ,Eshelman Institute for Innovation and theStructural Genomics Consortium . Development remains ongoing with this collaboration.
Silicon Valley
OnJanuary 31, 2022 , we entered into a Loan and Security Agreement (the Loan Agreement) withSilicon Valley Bank . The Loan Agreement provides for a four-year secured revolving loan facility (the Credit Facility) in an aggregate principal amount of up to$50.0 million . Proceeds from the Credit Facility may be used for working capital and general corporate purposes. We entered into the Loan Agreement to increase our financial flexibility by, among other things, providing a non-dilutive source of capital that can be drawn on to support our future working capital needs in light of the previously disclosed potential entry into a sole source contract with BARDA. We view the Credit Facility as a resource that will supplement our financial 20 -------------------------------------------------------------------------------- position by providing an alternative source of capital that can be utilized on an as-needed basis, for example, in advance of an anticipated (or future) shipment of TEMBEXA treatment courses to BARDA into theU.S. Strategic National Stockpile over the term of the Credit Facility.
Business Development Review
In addition to our transactions withCantex Pharmaceuticals, Inc. (Cantex), SymBio Pharmaceuticals Limited (SymBio) andOncoceutics, Inc. (Oncoceutics ), management is continuing to conduct a review and assessment of potential transaction opportunities with the goal of building our product candidate pipeline, including, but not limited to, licensing, merger or acquisition transactions, issuing or transferring shares of common stock, or the license, purchase or sale of specific assets, in addition to other potential actions aimed at maximizing stockholder value. There can be no assurance that this review will result in the identification or consummation of any additional transaction. FINANCIAL OVERVIEW Revenues
To date, we have not generated any revenue from product sales. All of our revenue to date has been derived from government grants and a contract and the receipt of up-front proceeds under our collaboration and license agreements.
InFebruary 2011 , we entered into a contract with BARDA, aU.S. governmental agency that supports the advanced research and development, manufacturing, acquisition, and stockpiling of medical countermeasures. The contract originally consisted of an initial performance period, referred to as the base performance segment, which ended onMay 31, 2013 , plus up to four extension periods, referred to as option segments, which have all been exercised. The contract was a cost-plus fixed fee development contract. Under the contract we received$72.5 million in expense reimbursement and$4.6 million in fees. The fourth and final option segment ended onSeptember 1, 2021 and the contract expired in accordance with its terms. Under the BARDA contract, we recognized revenue of$1.2 million during the three months endedMarch 31, 2021 . InSeptember 2019 , we entered into a license agreement with SymBio for worldwide rights to develop, manufacture and commercialize TEMBEXA in all human indications, excluding the use for treatment of orthopoxviruses, including smallpox. Under the contract, we received a$5.0 million upfront payment inOctober 2019 and could receive up to an additional$180.0 million in potential regulatory and commercial milestones. Since the license agreement was entered into inSeptember 2019 , we have recognized all of the$5.0 million of revenue related to the upfront payment. Under the sale of TEMBEXA to Emergent, this agreement will transfer to Emergent. We could receive up to$12.5 million from Emergent in brincidofovir regulatory milestones related to the transferred SymBio license agreement and will recognize revenue upon occurrence of the triggering events related to those milestones. In the future, we may generate revenue from a combination of product sales, license fees, milestone payments and royalties from the sales of products developed under licenses of our intellectual property. We expect that any revenue we generate will fluctuate from quarter to quarter as a result of the timing and amount of license fees, milestone and other payments, and the amount and timing of payments that we receive upon the sale of our products, to the extent any are successfully commercialized. If we fail to complete the development of any product candidates in a timely manner or obtain regulatory approval for them, our ability to generate future revenue, and our results of operations and financial position, would be materially adversely affected.
Research and Development Expenses
Since our inception, we have focused our resources on our research and
development activities, including conducting preclinical studies and clinical
trials, manufacturing development efforts and activities related to regulatory
filings for our product candidates. We recognize research and development
expenses as they are incurred. Costs for certain development activities are
recognized based on an evaluation of the progress to completion of specific
tasks using information and data provided to us by our vendors. We cannot
determine with certainty the duration and completion costs of the current or
future clinical studies of any product candidates. Our research and development
expenses consist primarily of:
•fees paid to consultants and contract research organizations (CROs), including
in connection with preclinical and clinical trials, and other related clinical
trial fees, such as for investigator grants, patient screening, laboratory work,
clinical trial database management, clinical trial material management and
statistical compilation and analysis;
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•salaries and related overhead expenses, which include stock option, restricted
stock units and employee stock purchase program compensation and benefits, for
personnel in research and development functions;
•payments to third-party manufacturers, which produce, test and package drug
substance and drug product (including continued testing of process validation
and stability);
•costs related to legal and compliance with regulatory requirements; and
•license fees for and milestone payments related to licensed products and
technologies.
The table below summarizes our research and development expenses for the periods
indicated (in thousands). Our direct research and development expenses consist
primarily of external costs, such as fees paid to investigators, consultants,
central laboratories and CROs, in connection with our clinical trials,
preclinical development, and payments to third-party manufacturers of drug
substance and drug product. We typically use our employee and infrastructure
resources across multiple research and development programs.
Three Months Ended
2022 2021
Direct research and development expenses $
11,344
5,328 4,462
Research and development personnel costs - stock-based compensation
1,903 1,377
Indirect research and development expenses 465 758
Total research and development expenses $
19,040
The successful development of product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs of the efforts that will be necessary to complete the development of any product candidates or the period, if any, in which material net cash inflows from any product candidates may commence. This is due to the numerous risks and uncertainties associated with our business, as detailed in Part II, Item IA, "Risk Factors" in this Quarterly Report on Form 10-Q and in our other filings with theSEC .
TEMBEXA (Brincidofovir, BCV)
We developed TEMBEXA for the treatment of smallpox. FDA marketing approval for TEMBEXA was received onJune 4, 2021 . Under our cost-plus-fixed fee BARDA contract, we incurred expenses in connection with the development of orthopoxvirus animal models, the demonstration of efficacy and pharmacokinetics of TEMBEXA in the animal models, the conduct of clinical studies for subjects with DNA viral infections, the manufacture and process validation of bulk drug substance and TEMBEXA 100 mg tablets and TEMBEXA 10 mg/mL oral suspension, and submission of the NDAs to the FDA. In addition, we have incurred additional supportive costs for the development of TEMBEXA for smallpox that we did not seek reimbursement for from BARDA. We have incurred costs related to the manufacturing of TEMBEXA for a possible procurement contract. These costs were expensed as incurred until the June approval. Following the June approval, costs related to the manufacturing of TEMBEXA are recorded and shown as inventories on the Consolidated Balance Sheets.
Imipridones program
InJanuary 2021 , we acquiredOncoceutics . In connection with the transaction, we recorded$82.9 million of acquired in-process research and development expenses for the three months endedMarch 31, 2021 , which included$25.0 million for an upfront payment toOncoceutics ,$43.4 million related to the fair value of 8,723,769 shares common stock issued toOncoceutics , a$14.0 million promissory note due on the one-year anniversary of the acquisition, and$0.3 million related to transaction costs consisting primarily of legal and professional fees. As we continue to develop and prepareOncoceutics' lead compound, ONC201, for aU.S. regulatory approval, we expect to incur significant research and development expense. We also plan to incur development expenses in connection with the continued development of otherOncoceutics' compounds, including ONC206 and ONC212. Dociparstat sodium (DSTAT) With the decision to stop development of DSTAT, we are currently in the process of closing our Phase 3 DASH AML trial. We expect to incur costs related to this program thru year end as we continue treatment for enrolled patients on the trial and begin to close down clinical trial sites. 22 --------------------------------------------------------------------------------
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related costs for employees in executive, finance, marketing, investor relations, information technology, legal, human resources and administrative support functions, including share-based compensation expenses and benefits. Other significant general and administrative expenses include costs related to accounting and legal services, costs of various consultants, director and officer liability insurance, occupancy costs and information systems.
Interest Income and Other, Net
Interest income and other, net consists primarily of interest earned on our cash, cash equivalents and short-term and long-term investments.
Share-based Compensation
TheFinancial Accounting Standards Board authoritative guidance requires that share-based payment transactions with employees be recognized in the financial statements based on their fair value and recognized as compensation expense over the vesting period. Total consolidated share-based compensation expense of$3.7 million and$2.6 million was recognized in the three months endedMarch 31, 2022 and 2021, respectively. The share-based compensation expense recognized included expense for stock options, RSUs and employee stock purchase plan purchase rights. We estimate the fair value of our share-based awards to employees and directors using the Black-Scholes pricing model. This estimate is affected by our stock price as well as assumptions including the expected volatility, expected term, risk-free interest rate, expected dividend yield, expected rate of forfeiture and the fair value of the underlying common stock on the date of grant.
For performance-based RSUs, we begin to recognize the expense when it is deemed probable that the performance-based goal will be achieved. We evaluate the probability of achieving performance-based goals on a quarterly basis.
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 unaudited consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles inthe United States of America (GAAP). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenues and expenses that are not readily apparent from other sources. Actual results and experiences may differ materially from these estimates. In addition, our reported financial condition and results of operations could vary if new accounting standards are enacted that are applicable to our business. We discussed accounting policies and assumptions that involve a higher degree of judgment and complexity in Note 1 to our consolidated financial statements in our Annual Report on Form 10-K for the year endedDecember 31, 2021 filed with theSEC onMarch 1, 2022 . There have been no material changes during the three months endedMarch 31, 2022 to our critical accounting policies, significant judgments and estimates disclosed in our Annual Report on Form 10-K for the year endedDecember 31, 2021 . 23
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RESULTS OF OPERATIONS
Comparison of the Three Months Ended
The following table summarizes our results of operations for the three months
ended
Three Months Ended March 31, Dollar Change % Change
2022 2021 Increase/(Decrease)
Revenues:
Contract and grant revenue $ - $ 1,433 $ (1,433) (100.0) %
Licensing revenue 15 2 13 650.0
Total revenues 15 1,435 (1,420) (99.0) %
Cost of goods sold 114 - 114 *
Gross Profit (99) 1,435 (1,534) (106.9) %
Operating expenses:
Research and development 19,040 11,862 7,178 60.5 %
General and administrative 5,632 4,136 1,496 36.2 %
Acquired in-process research and
development - 82,890 (82,890) (100.0) %
Total operating expenses 24,672 98,888 (74,216) (75.1) %
Loss from operations (24,771) (97,453) 72,682 (74.6) %
Other income:
Interest income and other, net 4 38 (34) (89.5) %
Net loss $ (24,767) $ (97,415) $ 72,648 (74.6) %
*Not meaningful or not calculable
Contract and Licensing Revenue
For the three months ended
Cost of Goods Sold
For the three months endedMarch 31, 2022 , cost of goods sold was$0.1 million and for the three months endedMarch 31, 2021 we did not record any cost of goods sold. The increase of$0.1 million is attributable to the write-off of inventory deemed nonsalable.
Research and Development Expenses
For the three months endedMarch 31, 2022 , our research and development expenses increased to$19.0 million compared to$11.9 million for the three months endedMarch 31, 2021 . The increase of$7.2 million , or 60.5%, is primarily related to the following: •an increase of$7.8 million in research and development expenses primarily related to ongoing development of ONC201 related to manufacturing of drug substance, clinical trial and regulatory support; •an increase of$1.4 million in compensation expenses, of which$0.5 million is related to non-cash stock compensation, to support development of our current pipeline; offset by •a decrease of$1.2 million in brincidofovir development expenses with the approval of TEMBEXA inJune 2021 ; •a decrease of$0.7 million in DSTAT development costs. 24 --------------------------------------------------------------------------------
General and Administrative Expenses
For the three months ended
•an increase of$0.7 million in legal, professional, and operational expenses; •an increase of$0.6 million in compensation expenses, primarily related to non-cash stock compensation expense; and •an increase of$0.2 million in ongoing stability expenses related to TEMBEXA inJune 2021 .
In connection with our acquisition ofOncoceutics inJanuary 2021 , we recorded a total of$82.9 million of acquired in-process research and development expenses for the three months endedMarch 31, 2021 , which included$82.6 million of in-process research and development assets expensed and$0.3 million of transaction costs. We paid consideration including an upfront payment of$25.0 million toOncoceutics ,$43.4 million related to the fair value of the 8,723,769 shares of common stock issued toOncoceutics , and a$14.0 million promissory note due on the one-year anniversary of the acquisition.
Interest Income and Other, Net
For the three months endedMarch 31, 2022 , our interest income and other, net decreased to$4,000 compared to$38,000 for the three months endedMarch 31, 2021 . This decrease is primarily attributable to loan fee amortization offsetting interest earned.
LIQUIDITY AND CAPITAL RESOURCES
As ofMarch 31, 2022 , we had capital available to fund operations of approximately$53.4 million . Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. We have incurred losses since our inception in 2000 and as ofMarch 31, 2022 , we had an accumulated deficit of$910.4 million . We may continue to incur losses for the foreseeable future. The size of our losses will depend, in part, on the rate of future expenditures and our ability to generate revenues. OnAugust 10, 2020 , we entered into an Open Market Sale AgreementSM (the Jefferies Sales Agreement) withJefferies LLC , as agent, pursuant to which we may offer and sell, from time to time through Jefferies, up to$75 million of shares of our common stock. Sales of our common stock made pursuant to the Jefferies Sales Agreement, if any, will be made under our shelf registration statement on Form S-3 (File No. 333-244146), which was declared effective by theSEC onAugust 17, 2020 . As ofMarch 31, 2022 , we have not sold any shares of our common stock under the Jefferies Sales Agreement. OnJanuary 20, 2021 , we entered into an underwriting agreement (the Underwriting Agreement) withJefferies LLC andCowen and Company, LLC , as representatives of the several underwriters named therein (collectively, the Underwriters), relating to the issuance and sale of 11,765,000 shares (the Shares) of our common stock. The price to the public in this offering was$8.50 per share, and the Underwriters agreed to purchase the Shares from us pursuant to the Underwriting Agreement at a price of$7.99 per share. Under the terms of the Underwriting Agreement, we granted the Underwriters a 30-day option to purchase up to 1,764,750 additional shares of our common stock at the public offering price. The net proceeds to us from this offering were approximately$107.8 million , as the Underwriters' option to purchase additional shares was exercised in full, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. The offering closed onJanuary 25, 2021 . OnMay 6, 2021 , we filed an automatic shelf registration statement on Form S-3 with theSEC (the 2021 Shelf Registration Statement), which became effective upon filing, pursuant to which we registered for sale an unlimited amount of any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, so long as we continue to satisfy the requirements of a "well-known seasoned issuer" underSEC rules. However, since we no longer qualify as a well-known seasoned issuer, onMarch 1, 2022 , we filed two post-effect amendments to the 2021 Shelf Registration Statement to convert it to a non-automatic shelf registration statement that we are eligible to use. The amendment to the 2021 Shelf Registration Statement to convert to a non-automatic shelf registration was declared effective by theSEC onMay 2, 2022 and enables us to offer for sale, from time to time, in one or more offerings,$250 million , in the aggregate, of common stock, preferred stock, debt securities, warrants, right. The 2021 Shelf Registration Statement will remain in effect for up to three years from the date it initially became effective. As ofMarch 31, 2022 , no sales have been made under the 2021 Shelf Registration Statement. 25 -------------------------------------------------------------------------------- OnJanuary 31, 2022 , we entered into a Loan and Security Agreement (the Loan Agreement) withSilicon Valley Bank . The Loan Agreement provides for a four-year secured revolving loan facility (the Credit Facility) in an aggregate principal amount of up to$50.0 million . Proceeds from the Credit Facility may be used for working capital and general corporate purposes. Reference the section headed "Recent Developments" above for additional information. OnMay 15, 2022 , we entered into an agreement to sell TEMBEXA to Emergent for$225 million upfront. Subject to the satisfaction or waiver of the closing conditions, we expect this transaction may close as early as the second quarter of 2022. We remain in negotiations with BARDA on the terms of a TEMBEXA procurement contract, which we also expect to complete in the second quarter of 2022. We cannot assure that adequate funding will be available on terms acceptable to us, if at all. Any additional equity financings will be dilutive to our stockholders and any additional debt may involve operating covenants that may restrict our business. If adequate funds are not available through these means, we may be required to curtail significantly one or more of our research or development programs, and any launch and other commercialization expenses for any of our products that may receive marketing approval. We cannot assure you that we will successfully develop or commercialize our products under development or that our products, if successfully developed, will generate revenues sufficient to enable us to earn a profit. We believe that our expected cash flow from sale of TEMBEXA, existing cash, cash equivalents, and investments will enable us to fund our current operating expenses and capital requirements for at least the next 12 months. However, changing circumstances beyond our control may cause us to consume capital more rapidly than we currently anticipate.
Cash Flows
The following table sets forth the significant sources and uses of cash for the
period (in thousands):
Three Months Ended March 31,
2022 2021
Cash sources and uses:
Net cash used in operating activities $ (23,447) $ (37,896)
Net cash provided by (used in) investing activities 53,467 (88,716)
Net cash (used in) provided by financing activities (13,460) 111,703
Net increase (decrease) in cash and cash equivalents $
16,560
The table above sets forth the net decrease or increase in cash and cash equivalents alone and not the change in our total capital available to fund operations, which also includes short-term and long-term investments. Cash and cash equivalents includes cash on hand and securities with original maturities of 90 days or less. Operating Activities Net cash used in operating activities of$23.4 million for the three months endedMarch 31, 2022 was primarily the result of our$24.8 million net loss and the change in operating assets and liabilities offset by the add-back of non-cash adjustments. The change in operating assets and liabilities includes an increase in prepaid expenses and other assets of$1.0 million , a decrease of$0.9 million in accounts payable and accrued liabilities and an increase in inventories of$0.6 million . Non-cash expenses included add-backs of$3.7 million for share-based compensation and$0.1 million of amortization of discount/premium on investments. Net cash used in operating activities of$37.9 million for the three months endedMarch 31, 2021 was primarily the result of our$97.4 million net loss and the change in operating assets and liabilities, partially offset by the add-back of non-cash expenses. The change in operating assets and liabilities includes an increase in prepaid expenses and other assets of$0.3 million , an increase in accounts receivable of$0.2 million and a decrease of$0.3 million in accounts payable and accrued liabilities. Non-cash expenses included add-backs of$43.4 million for the fair value of common stock issued in relation to theOncoceutics acquisition,$14.0 million for the note payable due on the one-year anniversary of theOncoceutics acquisition,$2.6 million for share-based compensation,$0.1 million of depreciation of property and equipment and$0.1 million of amortization of discount/premium on investments.
Investing Activities
Net cash provided by investing activities of$53.5 million for the three months endedMarch 31, 2022 was primarily the result of the maturity of$51.0 million in short-term investments and the sale of$7.7 million in short-term investments, offset by the purchase of$5.3 million in short-term investments. Net cash used in investing activities of$88.7 million for the three months 26 --------------------------------------------------------------------------------
ended
Financing Activities
Net cash used by financing activities of$13.5 million for the three months endedMarch 31, 2022 was primarily the result of the$14.0 million payment of the note payable related to theOncoceutics acquisition and the payment of$0.1 million of debt issuance costs, partially offset by$0.7 million in proceeds from the exercise of stock options and stock purchases through our ESPP. Net cash provided by financing activities of$111.7 million for the three months endedMarch 31, 2021 was primarily the result of$107.8 million in proceeds from the issuance of common stock and$3.9 million in proceeds from the exercise of stock options and stock purchases through our ESPP.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
There have been no material changes to our contractual obligations and commitments outside the ordinary course of business from those disclosed under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations-Contractual Obligations and Commitments" as contained in our Annual Report on Form 10-K for the year endedDecember 31, 2021 filed by us with theSEC onMarch 1, 2022 .
Off-Balance Sheet Arrangements
During the periods presented, we did not have, nor do we currently have, any
off-balance sheet arrangements as defined under
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