Certain statements contained in this Quarterly Report on Form 10-Q may
constitute forward-looking statements 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 words or phrases "would be," "will allow," "intends
to," "will likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project," or similar expressions, or the negative of such words or
phrases, are intended to identify "forward-looking statements." We have based
these forward-looking statements on our current expectations and projections
about future events. Because such statements include risks and uncertainties,
actual results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause or contribute to these
differences include those below and elsewhere in this Quarterly Report on Form
10-Q, our Annual Report on Form 10-K, particularly in Part I - Item 1A, "Risk
Factors," and our other filings with the Securities and Exchange Commission.
Statements made herein are as of the date of the filing of this Form 10-Q with
the Securities and Exchange Commission and should not be relied upon as of any
subsequent date. Unless otherwise required by applicable law, we do not
undertake, and we specifically disclaim, any obligation to update any
forward-looking statements to reflect occurrences, developments, unanticipated
events or circumstances after the date of such statement.



The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our unaudited financial statements
and related notes that appear in Item 1 of this Quarterly Report on Form 10-Q
and with our audited financial statements and related notes for the year ended
December 31, 2019, which are included in our Annual Report on Form 10-K filed
with the Securities and Exchange Commission on February 28, 2020.



Overview



We are a clinical-stage biotechnology company focused on the discovery and
development of novel glycomimetic drugs to address unmet medical needs resulting
from diseases in which carbohydrate biology plays a key role. We are developing
a pipeline of glycomimetics, which are molecules that mimic the structure of
carbohydrates involved in important biological processes, to inhibit
disease-related functions of carbohydrates such as the roles they play in
inflammation, cancer and infection. We believe this represents an innovative
approach to drug discovery to treat a wide range of diseases. We are focusing
our efforts on drug candidates for rare diseases that we believe will qualify
for orphan drug designation.



Our proprietary glycomimetics platform is based on our expertise in carbohydrate
chemistry and our understanding of the role carbohydrates play in key biological
processes. Most human proteins are modified by the addition of complex
carbohydrate structures to the surface of such proteins, which affects the
functions of the proteins and their interactions with other molecules. Our
initial research and development efforts have focused on drug candidates
targeting selectins, which are proteins that serve as adhesion molecules and
bind to carbohydrates that are involved in the inflammatory component and
progression of a wide range of diseases, including hematologic disorders, cancer
and cardiovascular disease. For example, we believe that members of the selectin
family play a key role in tumor metastasis and resistance to chemotherapy.
Inhibiting specific carbohydrates from binding to selectins has long been viewed
as a potentially attractive approach for therapeutic intervention. The ability
to successfully develop drug-like compounds that inhibit binding with selectins,
known as selectin antagonists, has historically been limited by the complexities
of carbohydrate chemistry. We believe our expertise in carbohydrate chemistry
enables us to design selectin antagonists and other glycomimetics that may
inhibit the disease-related functions of certain carbohydrates in order to
develop novel drug candidates to address orphan diseases with high unmet medical
need.



Our lead glycomimetic drug candidate, uproleselan, is a specific E-selectin
inhibitor that we are developing to be used in combination with chemotherapy to
treat patients with acute myeloid leukemia, or AML, a life-threatening
hematologic cancer, and potentially other hematologic cancers. We completed an
initial Phase 1 trial in healthy volunteers for uproleselan, and in May 2017 we
completed enrollment in a Phase 1/2 clinical trial in patients with either
relapsed/refractory or de novo/secondary AML. In December 2018, at the annual
meeting of the American Society of Hematology, or ASH, we presented clinical
data from this Phase 1/2 clinical trial that showed high remission rates,
improved overall survival and improved event-free survival, all compared to
historical controls derived from third-party clinical trials evaluating
treatment with standard chemotherapy.

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In March 2018, we announced our design for a randomized, double-blind,
placebo-controlled Phase 3 clinical trial to evaluate uproleselan in individuals
with relapsed/refractory AML, which design is aligned with guidance received
from the U.S. Food and Drug Administration, or FDA. Based on consultations with
the FDA, the single pivotal trial is planned to enroll approximately 380 adult
patients with relapsed or refractory AML at centers in the United States,
Canada, Europe and Australia. We dosed the first patient in this trial in
November 2018. The primary efficacy endpoint will be overall survival;
importantly, the FDA has advised us that data on overall survival will not need
to be censored for transplant in the primary efficacy analysis, meaning that
patients who proceed to transplant will continue to be included as part of the
survival analysis. All patients will be treated with standard chemotherapy of
either MEC (mitoxantrone, etoposide and cytarabine) or FAI (fludarabine,
cytarabine and idarubicin), with approximately one-half of the patients
randomized to receive uproleselan in addition to chemotherapy. Patients
receiving uproleselan will be dosed for one day prior to initiation of
chemotherapy, twice a day through the chemotherapy regimen, and then for two
days after the end of chemotherapy, which was the same regimen as in the Phase
1/2 trial. The dose regimen will be fixed, rather than weight-based, which we
believe will simplify administration. We plan to offer up to three cycles of
consolidation therapy in both arms of the trial for patients who achieve
remission. We believe that multiple cycles of treatment in patients who respond
may drive an even deeper response in patients treated with uproleselan. If this
is the case, it could lengthen the duration of remission with potential for
additional benefit on survival. Key secondary endpoints of the Phase 3 trial
will include the incidence of severe mucositis and remission rate, which will be
assessed in a hierarchical fashion which may provide supportive data.

The recent imposition of "lockdown,"  "social distancing" and "shelter in place"
directives by state and federal governments in the United States as well as
governments in other regions of the world in response to the COVID-19 pandemic,
including in locations in which our Phase 3 clinical trial of uproleselan is
being conducted, has resulted in slowed clinical site initiation, patient
recruitment and enrollment rates in April 2020. We cannot at this time
fully assess whether these slower rates reflect a long- or short-term change
that could potentially materially adversely impact the timing of completion of
enrollment of our Phase 3 clinical trial. We continue to closely monitor the
COVID-19 situation and any potential impact to our planned activities.



Uproleselan received orphan drug designation from the FDA in May 2015 for the
treatment of patients with AML. In June 2016, uproleselan received fast track
designation from the FDA for the treatment of adult patients with relapsed or
refractory AML and elderly patients aged 60 years or older with AML. In May
2017, uproleselan received Breakthrough Therapy designation from the FDA for the
treatment of adult patients with relapsed or refractory AML. In May 2017, the
European Commission, based on a favorable recommendation from the EMA Committee
for Orphan Medicinal Products, granted orphan designation for uproleselan for
the treatment of patients with AML. In June 2018, we received a response from
the EMA to our request for scientific advice with respect to our Marketing
Authorization Application, or MAA, development plan. Based on this guidance, we
are conducting the global Phase 3 clinical trial and intend to pursue regulatory
approval of uproleselan for the treatment of AML.



In May 2018, we signed a Cooperative Research and Development Agreement, or
CRADA, with the National Cancer Institute, or NCI, part of the National
Institutes of Health. Under the terms of the CRADA, we will collaborate with
both the NCI and the Alliance for Clinical Trials in Oncology to conduct a Phase
2/3 randomized, controlled clinical trial testing the addition of uproleselan to
a standard cytarabine/daunorubicin chemotherapy regimen (7&3) in older adults
with previously untreated AML who are suitable for intensive chemotherapy. The
primary endpoint will be overall survival, which is defined as the time from the
date of randomization to death from any cause, with a planned interim analysis
based on event-free survival after the first 250 patients have been enrolled in
the trial. The full trial is expected to enroll approximately 670
patients. Under the terms of the CRADA, the NCI may also fund additional
research, including clinical trials involving pediatric patients with AML as
well as preclinical experiments and clinical trials evaluating alternative
populations and chemotherapy regimens. We will supply uproleselan as well as
provide financial support to augment data analysis and monitoring for the Phase
3 program. The trial opened for enrollment in early 2019 and enrolled the first
patient in April 2019.



As a potential life-cycle extension to uproleselan, we have rationally designed
an innovative antagonist of E-selectin, GMI-1687, that could be suitable for
subcutaneous administration. When given by subcutaneous injection in animal
models, GMI-1687 has been observed to have equivalent activity to uproleselan,
but at an approximately 1,000-fold lower dose. We believe that GMI-1687 could be
developed to broaden the clinical usefulness of an E-selectin antagonist to
conditions where outpatient treatment is preferred or required. We are currently
conducting preclinical

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studies with GMI-1687 to support our planned submission of an investigational new drug application, or IND, to the FDA.





We are developing an additional drug candidate, GMI-1359, that simultaneously
targets both E-selectin and a chemokine receptor known as CXCR4. Since
E-selectin and CXCR4 are implicated in the retention of cancer cells in the bone
and bone marrow, we believe that targeting both E-selectin and CXCR4 with a
single compound could improve efficacy in the treatment of cancers that affect
the bone and bone marrow, particularly solid tumors that have a propensity to
metastasize to bone, such as breast and prostate cancer. We completed a Phase 1
randomized, double-blind, placebo-controlled, single-dose escalation trial of
GMI-1359 in healthy volunteers. In this trial, volunteer participants received a
single injection of either GMI-1359 or placebo, after which they were evaluated
for safety, tolerability and pharmacokinetics, or PK. This trial was conducted
at a single site in the United States. GMI-1359 was generally well tolerated in
this trial, with no participants experiencing serious adverse events. In the
fourth quarter of 2019, we initiated a Phase 1b trial of GMI-1359 in hormone
receptor positive breast cancer patients whose tumors have spread to bone, and
the first patient was dosed in January 2020. The trial is being conducted at
Duke University and will evaluate dose escalation as well as safety, PK and
pharmacodynamics markers of biologic activity in these patients. In January
2020, the FDA granted GMI-1359 orphan drug designation and rare pediatric
disease designation for the treatment of osteosarcoma, a rare cancer affecting
approximately 900 adolescents each year in the United States. These designations
are expected to make GMI-1359 eligible for priority review by the FDA.



In addition to our programs described above, we are also advancing other
preclinical-stage programs. These programs include small-molecule glycomimetic
compounds that inhibit the protein galectin-3, which we believe may have
potential to be used for the treatment of fibrosis, cancer and cardiovascular
disease.



We previously developed another glycomimetic drug candidate, rivipansel, a
pan-selectin antagonist for the potential treatment of vaso-occlusive crisis, a
debilitating and painful condition that occurs periodically throughout the life
of a person with sickle cell disease, or SCD. Rivipansel received fast track
designation from the FDA as well as orphan drug designation from the FDA in the
United States and from the European Medicines Agency, or EMA, in the European
Union. We entered into an exclusive license agreement with Pfizer Inc., or the
Pfizer Agreement, for Pfizer to further develop, obtain regulatory approval and
potentially commercialize rivipansel worldwide. Pfizer conducted a pivotal Phase
3 clinical trial to evaluate the efficacy and safety of rivipansel in patients
aged six and older with SCD who were hospitalized for a vaso-occlusive crisis
and required treatment with intravenous opioids. The clinical trial did not meet
its primary or key secondary efficacy endpoints, and Pfizer has terminated the
Pfizer Agreement. The IND for rivipansel has been transferred back to us, and we
are currently evaluating what, if any, next steps to take with respect to the
rivipansel program after reviewing the Phase 3 data more completely.



We commenced operations in 2003, and our operations to date have been limited to
organizing and staffing our company, business planning, raising capital,
developing our glycomimetics platform, identifying potential drug candidates,
undertaking preclinical studies and conducting, both alone and in collaboration
with third parties, clinical trials of uproleselan, GMI-1359 and rivipansel. To
date, we have financed our operations primarily through private placements of
our securities, up-front and milestone payments under our license and
collaboration agreements and the net proceeds from public offerings of common
stock, including sales of common stock under at-the-market sales facilities with
Cowen and Company LLC, or Cowen. We have no approved drugs currently available
for sale, and substantially all of our revenue to date has been revenue from
up-front and milestone payments, although we have received nominal amounts of
revenue under research grants.



Since inception, we have incurred significant operating losses. We had an
accumulated deficit of $266.1 million as of March 31, 2020, and we expect to
continue to incur significant expenses and operating losses over at least the
next several years. Our net losses may fluctuate significantly from quarter to
quarter and year to year, depending on the timing of our clinical trials and our
expenditures on other research and development activities. We anticipate that
our expenses will increase substantially as we:

· initiate and conduct our planned clinical trials of uproleselan, GMI-1359 and

GMI-1687, including fulfilling our funding and supply commitments related to

the clinical trial of uproleselan being conducted in collaboration with NCI;




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· conduct NDA-enabling activities related to manufacture, toxicology and clinical

pharmacology for our product candidates;

· manufacture additional uproleselan drug supplies for validation and prepare for

commercialization;

· seek to discover and develop additional drug candidates;

· seek regulatory approvals for any drug candidates that successfully complete

clinical trials;

· ultimately establish a sales, marketing and distribution infrastructure and

scale up external manufacturing capabilities to commercialize any drug

candidates for which we may obtain regulatory approval;

· maintain, expand and protect our intellectual property portfolio;

· hire additional clinical, quality control, regulatory and scientific personnel;

and

· add operational, financial and management information systems and personnel,

including personnel to support our drug development and potential future

commercialization efforts.




To fund further operations, we will need to raise capital. We may obtain
additional financing in the future through the issuance of our common stock,
through other equity or debt financings, potentially including the use of our
at-the-market sales facility with Cowen, or through collaborations or
partnerships with other companies, such as our recent collaboration with
Apollomics. We may not be able to raise additional capital on terms acceptable
to us, or at all, and any failure to raise capital as and when needed could
compromise our ability to execute on our business plan. For example, the current
global COVID-19 pandemic presents material uncertainty and its disruption of the
capital markets may have a material adverse impact on our ability to raise
additional capital if we decided to do so. Although it is difficult to predict
future liquidity requirements, we believe that our existing cash and cash
equivalents will be sufficient to fund our operations into 2022. However, our
ability to successfully transition to profitability will be dependent upon
achieving a level of revenues adequate to support our cost structure. We cannot
assure you that we will ever be profitable or generate positive cash flow from
operating activities.

COVID-19 Business Update

With the global spread of the ongoing COVID-19 pandemic in the first quarter of
2020, we have implemented business continuity plans designed to address and
mitigate the impact of the COVID-19 pandemic on our employees and our
business. While we are experiencing limited financial impacts at this time
beyond the delays in recruitment in our ongoing uproleselan Phase 3 clinical
trial, given the global economic slowdown, the overall disruption of global
healthcare systems and the other risks and uncertainties associated with the
pandemic, our business, financial condition, results of operations and growth
prospects could be materially adversely affected. We continue to closely monitor
the COVID-19 situation as we evolve our business continuity plans and response
strategy. In March 2020, our workforce transitioned to working remotely in
accordance with federal and state declarations. We are currently preparing plans
to reopen our office to allow employees to return to the office based on a
phased approach that is consistent with federal and state guidelines, with a
focus on employee safety and optimal work environment.

Our Collaboration and License Agreements





Apollomics



In January 2020, we entered into an exclusive collaboration and license
agreement with Apollomics (Hong Kong) Limited, or Apollomics, for the
development and commercialization of uproleselan and GMI-1687 in Mainland China,
Hong Kong, Macau and Taiwan, also known as Greater China. Under the terms of the
agreement, Apollomics will be responsible for clinical development and
commercialization in Greater China. We will also collaborate with Apollomics to
advance the preclinical and clinical development of GMI-1687. We received an
upfront cash payment of $9.0 million and, subject to the terms of the agreement,
will be eligible to receive potential milestone payments totaling approximately
$180.0 million, as well as tiered royalties ranging from the high single digits
to 15%, as a percentage of net sales. Apollomics will be responsible for all
costs related to development, regulatory approvals, and commercialization
activities for uproleselan and GMI-1687 in Greater China, and we and Apollomics
expect to enter

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into clinical and commercial supply agreements with respect to our provision of
uproleselan and GMI-1687 to Apollomics. We retain all rights for both compounds
in the rest of the world.



Pfizer

In October 2011, we entered into the Pfizer Agreement, under which we granted
Pfizer an exclusive worldwide license to develop and commercialize products
containing rivipansel for all fields and uses. Pfizer was required to use
commercially reasonable efforts, at its expense, to develop, obtain regulatory
approval for and commercialize rivipansel for SCD in the United States. On
August 2, 2019, Pfizer announced that its pivotal Phase 3 clinical trial to
evaluate the efficacy and safety of rivipansel in patients aged six and older
with SCD who were hospitalized for a vaso-occlusive crisis and required
treatment with intravenous opioids did not meet its primary or key secondary
efficacy endpoints. On February 5, 2020, Pfizer delivered notice to us of its
termination of the Pfizer Agreement, which termination was effective as of April
5, 2020. Following the effective date of the termination of the Pfizer
Agreement, we retain all rights to the potential future development and
commercialization of rivipansel. We did not earn any revenue or receive any
payments from Pfizer during the three months ended March 31, 2020 or 2019 and
will not be eligible to receive any future payments from Pfizer following the
termination of the Pfizer Agreement.



University of Basel



We entered into a research services agreement, or the Research Agreement, with
the University of Basel, or the University, for biological evaluation of
selectin antagonists. While the scope of work under the Research Agreement ended
in 2017, certain patents covering the rivipansel compound are subject to
provisions of the Research Agreement. Under the terms of the Research Agreement,
we owed the University 10% of any milestone and royalty payments received from
Pfizer with respect to rivipansel. There were no payments due to the University
for the three months ended March 31, 2020 or 2019, and as a result of the
termination of the Pfizer Agreement, we do not expect to make any future
payments to the University.




Critical Accounting Policies and Significant Judgments and Estimates





Our management's discussion and analysis of our financial condition and results
of operations are based on our financial statements, which have been prepared in
accordance with U.S. generally accepted accounting principles. The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses in our
financial statements. On an ongoing basis, we evaluate our estimates and
judgments, including those related to our revenue recognition, accrued research
and development expenses, stock-based compensation expense and income taxes. We
base our estimates on historical experience, known trends and events and various
other factors that we believed to be 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
resources. Actual results may differ from these estimates and judgments under
different assumptions or conditions. We periodically review our estimates in
light of changes in circumstances, facts and experience. The effects of material
revisions in estimates are reflected in our financial statements prospectively
from the date of the change in estimate.



We define our critical accounting policies as those accounting principles
generally accepted in the United States that require us to make subjective
estimates and judgments about matters that are uncertain and are likely to have
a material impact on our financial condition and results of operations, as well
as the specific manner in which we apply those principles. For a description of
our critical accounting policies, please see the disclosures in Part II, Item 7
of our Annual Report on Form 10-K for the year ended December 31, 2019. There
have not been any material changes to our critical accounting policies since
December 31, 2019.


Components of Operating Results

Revenue



To date, we have not generated any revenue from the sale of our drug candidates
and do not expect to generate any revenue from the sale of drugs in the near
future. Substantially all of our historical revenue has consisted of upfront and
milestone payments under the agreements with Pfizer and Apollomics.

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Research and Development

Research and development expenses consist of expenses incurred in performing
research and development activities, including compensation and benefits for
full-time research and development employees, facilities expenses, overhead
expenses, cost of laboratory supplies, clinical trial and related clinical
manufacturing expenses, fees paid to CROs and other consultants and other
outside expenses. Other preclinical research and platform programs include
activities related to exploratory efforts, target validation, lead optimization
for our earlier programs and our proprietary glycomimetics platform. Our
research and development expenses have related primarily to the development of
rivipansel, uproleselan and our other drug candidates.

We do not currently utilize a formal time allocation system to capture expenses
on a project-by-project basis because we are organized and record expense by
functional department and our employees may allocate time to more than one
development project. Accordingly, we only allocate a portion of our research and
development expenses by functional area and by drug candidate.

Research and development costs are expensed as incurred. Non-refundable advance
payments for goods or services to be received in the future for use in research
and development activities are deferred and capitalized. The capitalized amounts
are expensed as the related goods are delivered or the services are performed.

Research and development activities are central to our business model. Drug
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 and duration of later stage clinical trials.
We expect our research and development expenses to increase over the next
several years as we seek to progress uproleselan, GMI-1359 and our other drug
candidates into and through clinical development. However, it is difficult to
determine with certainty the duration and completion costs of our current or
future preclinical studies and clinical trials of our drug candidates, or if,
when or to what extent we will generate revenues from the commercialization and
sale of any of our drug candidates that obtain regulatory approval. We may never
succeed in achieving regulatory approval for any of our drug candidates.

The duration, costs and timing of clinical trials and development of our drug 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 trial is conducted;

· the length of time required to enroll eligible patients, which we expect to be

lengthened as a result of the ongoing COVID-19 pandemic;

· 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 safety and efficacy profile of the drug candidate.


In addition, the probability of success for each drug candidate will depend on
numerous factors, including competition, manufacturing capability and commercial
viability. We will determine which programs to pursue and how much to fund each
program in response to the scientific and clinical success of each drug
candidate, as well as an assessment of each drug candidate's commercial
potential.

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General and Administrative

General and administrative expenses consist primarily of salaries and other
related costs, including stock-based compensation, for personnel in executive,
finance, accounting, business development and human resources functions. Other
significant costs include facility costs not otherwise included in research and
development expenses, legal fees relating to patent and corporate matters and
fees for accounting and consulting services. We anticipate that our general and
administrative expenses will increase in the future to support our continued
research and development activities.

Interest Income

Interest income consists of interest income earned on our cash and cash equivalents.

Results of Operations for the Three Months Ended March 31, 2020 and 2019

The following table sets forth our results of operations for the three months ended March 31, 2020 and 2019:







                                                      Three Months Ended March 31,          Period-to-Period
(in thousands)                                          2020                 2019                Change
Revenue                                            $        9,000      $              -    $            9,000
Costs and expenses:
Research and development expense                           12,668                11,773                   895
General and administrative expense                          4,440          

      3,360                 1,080
Total costs and expenses                                   17,108                15,133                 1,975
Loss from operations                                      (8,108)              (15,133)                 7,025
Interest income                                               445                 1,049                 (604)

Net loss and comprehensive loss                    $      (7,663)      $   

   (14,084)    $            6,421




Revenue



We recognized $9.0 million in revenue during the three months ended March 31,
2020 from the Apollomics Agreement for the development and commercialization of
uproleselan and GMI-1687 in Greater China. There was no revenue recognized
during the three months ended March 31, 2019.



Research and Development Expense

The following table summarizes our research and development expense by functional area for the three months ended March 31, 2020 and 2019:







                                                     Three Months Ended March 31,        Period-to-Period

(in thousands)                                          2020                2019              Change
Clinical development                               $        5,023      $        2,607    $           2,416
Manufacturing and formulation                               3,137               5,244              (2,107)
Contract research services, consulting and
other costs                                                   568                 594                 (26)
Laboratory costs                                              574                 502                   72
Personnel-related                                           2,630               2,318                  312

Stock-based compensation                                      736                 508                  228
Research and development expense                   $       12,668      $   

   11,773    $             895




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The following table summarizes our research and development expense by drug candidate for the three months ended March 31, 2020 and 2019:







                                                     Three Months Ended March 31,         Period-to-Period
(in thousands)                                          2020                2019               Change
Uproleselan                                        $        8,161      $        7,874    $              287
GMI-1359                                                      104                 166                  (62)

Other research and development                              1,037                 907                   130
Personnel-related and stock-based compensation              3,366               2,826                   540
Research and development expense                   $       12,668      $   

   11,773    $              895




Research and development expense increased by $895,000, or 8%, to $12.7 million
for the quarter ended March 31, 2020 from $11.8 million for the quarter ended
March 31, 2019. Clinical development expenses increased by $2.4 million,
primarily as a result of increased clinical costs related to our ongoing global
Phase 3 clinical trial of uproleselan in individuals with relapsed/refractory
AML and the Phase 2/3 clinical trial being conducted by the NCI, which opened
for enrollment in early 2019. Personnel-related and stock-based compensation
expenses increased due to annual performance adjustments processed in the
quarter ended March 31, 2020. These increases were offset in part by a $2.1
million decrease in manufacturing and formulation due to lower raw material
costs in the first quarter ended March 31, 2020 as compared to the first quarter
ended March 31, 2019.


General and Administrative Expense

The following table summarizes the components of our general and administrative expense for the three months ended March 31, 2020 and 2019:







                                                         Three Months Ended March 31,          Period-to-Period
(in thousands)                                            2020                  2019                Change
Personnel-related                                    $         1,607       $         1,134    $              473

Stock-based compensation                                       1,086                   875                   211
Legal, consulting and other professional expenses              1,508                 1,135                   373
Other                                                            239                   216                    23
General and administrative expense                   $         4,440      

$         3,360    $            1,080




General and administrative expense increased for the three months ended March
31, 2020 by $1.1 million, or 32%, compared to the first quarter ended March 31,
2019 primarily due to an increase in personnel-related costs and professional
fees including legal, patent and consulting expenses. Personnel-related expenses
increased due to additional general and administrative headcount and annual
salary adjustments awarded in the first quarter of 2020. Patent, legal fees,
 consulting and other professional expenses including director and officer's
insurance premiums, increased by $373,000 for the quarter ended March 31, 2020
as compared to March 31, 2019.



Interest Income



Interest income decreased by $604,000 to $445,000 for the quarter ended March
31, 2020 from $1.0 million for the quarter ended March 31, 2019, due to lower
average cash balances and lower interest rates on those balances.



Liquidity and Capital Resources





Sources of Liquidity



We have historically financed our operations primarily through public offerings
and private placements of our capital stock, including sales agreements with
Cowen, and upfront and milestone payments from our license and collaboration
agreements. As of March 31, 2020, we had $154.8 million in cash and cash
equivalents.



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In September 2017, we entered into a new at-the-market sales agreement with
Cowen, under which we may offer and sell, from time to time at our sole
discretion, shares of our common stock having an aggregate offering price of up
to $100.0 million through Cowen acting as our sales agent. During the year ended
December 31, 2017, we sold an aggregate of 1,600,000 shares of our common stock
under the at-the-market facility for net proceeds of $19.3 million. There were
no sales under this agreement during the three months ended March 31, 2020 and
2019. As of March 31, 2020, we have the ability to sell up to $80.0 million of
common stock under the at-the-market sales agreement with Cowen.



We entered into a collaboration and license agreement with Apollomics in January
2020 and are potentially eligible to earn milestone payments and royalties under
that agreement. In January 2020, Apollomics made an upfront payment to the
Company of $9.0 million. Our ability to earn the milestone and royalty payments
and their timing will be dependent upon the outcome of Apollomics' activities
and is uncertain at this time.



Funding Requirements



Our primary uses of capital are, and we expect will continue to be, compensation
and related expenses, third-party clinical research and development services,
laboratory and related supplies, clinical costs, legal and other regulatory
expenses and general overhead costs.



The successful development of any of our drug candidates is highly uncertain. As
such, at this time, we cannot reasonably estimate or know the nature, timing and
costs of the efforts that will be necessary to complete the remainder of the
development of uproleselan or our other drug candidates. We are also unable to
predict when, if ever, material net cash inflows will commence from uproleselan
or our other drug candidates. This is due to the numerous risks and
uncertainties associated with developing drugs, including the uncertainty of:



 ·  successful enrollment in, and completion of, clinical trials;




 ·  receipt of marketing approvals from applicable regulatory authorities;



· establishing commercial manufacturing capabilities or making arrangements with


    third-party manufacturers;



· obtaining and maintaining patent and trade secret protection and regulatory


    exclusivity for drug candidates;



· launching commercial sales of drugs, if and when approved, whether alone or in


    collaboration with others; and



· obtaining and maintaining healthcare coverage and adequate reimbursement.






A change in the outcome of any of these variables with respect to the
development of any of our drug candidates would significantly change the costs
and timing associated with the development of that drug candidate. Because our
drug candidates are in various stages of clinical and preclinical development
and the outcome of these efforts is uncertain, we cannot estimate the actual
amounts necessary to successfully complete the development and commercialization
of our drug candidates or whether, or when, we may achieve profitability. Until
such time, if ever, as we can generate substantial product revenues, we expect
to finance our cash needs through a combination of equity or debt financings and
collaboration arrangements, including our existing license agreement with
Apollomics. Except for Apollomics' conditional obligations to make milestone and
royalty payments to us under our license agreement, we do not have any committed
external source of liquidity.



To the extent that we raise additional capital through the future sale of equity
or debt, the ownership interest of our stockholders will be diluted, and the
terms of these securities may include liquidation or other preferences that
adversely affect the rights of our existing common stockholders. If we raise
additional funds through the issuance of convertible debt securities, these
securities could contain covenants that would restrict our operations.



We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available on reasonable terms, or at all. If we raise additional funds through collaboration arrangements in the future, we



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may have to relinquish valuable rights to our drug candidates or grant licenses
on terms that may not be favorable to us. If we are unable to raise additional
funds through equity or debt financings when needed, we may be required to
delay, limit, reduce or terminate our drug development or future
commercialization efforts or grant rights to develop and market drug candidates
that we would otherwise prefer to develop and market ourselves.

The recent imposition of "lockdown," "social distancing" and "shelter in place"
directives by state and federal governments in the United States as well as
governments in other regions of the world in response to the COVID-19 pandemic
has resulted in slowed clinical site initiation, patient recruitment and
enrollment rates in April 2020 in our Phase 3 clinical trial of uproleselan. We
cannot at this time determine whether these slower rates reflect a long- or
short-term change that could potentially materially adversely impact our cash
available to fund our continuing operations or the timing of completion of
enrollment of our Phase 3 clinical trial. We continue to closely monitor the
COVID-19 situation and any potential impact to our planned activities.



Outlook



Based on our research and development plans and our timing expectations related
to the progress of our programs, we expect that our existing cash and cash
equivalents will enable us to fund our operating expenses and capital
expenditure requirements into 2022. We have based this estimate on assumptions
that may prove to be wrong, and we could use our capital resources sooner than
we expect. Additionally, the process of testing drug candidates in clinical
trials is costly, and the timing of progress in these trials is uncertain. As
discussed above, at this time we can not accurately predict changes in our cash
used in operating activities or the timing of completion of enrollment in our
Phase 3 clinical trial of uproleselan due to the COVID-19 pandemic. We are
continuing to assess and monitor the COVID-19 situation and the potential impact
to our clinical trial plans and expectations as a result of delayed site
initiations and patient recruitment and enrollment.  As we continue to gather
data regarding our clinical trial activities, we expect to be in a position to
assess the need, if any, to change our previous guidance.



Cash Flows



The following is a summary of our cash flows for the three months ended March
31, 2020 and 2019:




                                                 Three Months Ended March 31,
   (in thousands)                                  2020                 2019

Net cash provided by (used in):


   Operating activities                       $      (3,500)      $       (14,348)
   Investing activities                                  (8)                  (40)
   Financing activities                                  130                    31

Net change in cash and cash equivalents $ (3,378) $ (14,357)






Operating Activities



Net cash used in operating activities for the three months ended March 31, 2020
and 2019 was primarily the result of ongoing costs associated with our
uproleselan clinical development programs which includes significant costs for
project support, investigator site start-up costs and patient enrollment fees as
well as clinical manufacturing costs. These cash expenses were offset by
non-cash expenses for stock-based compensation, lease expense and depreciation,
and for the three months ended March 31, 2020, the upfront payment of $9.0
million received from Apollomics.



Investing Activities


Net cash used in investing activities for the three months ended March 31, 2020 and 2019 was for computer, office and laboratory equipment.





Financing Activities


Net cash provided by financing activities for the three months ended March 31, 2020 and 2019 consisted of proceeds from stock option exercises.



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Off-Balance Sheet Arrangements

During the three months ended March 31, 2020, we did not have, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

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