FORWARD LOOKING STATEMENTS



This Quarterly Report on Form
10-Q
of Magenta Therapeutics, Inc. (the "Company") contains or incorporates
statements that constitute forward-looking statements within the meaning of the
federal securities laws. Any express or implied statements that do not relate to
historical or current facts or matters are forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will," "could," "should," "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "predicts," "projects," "seeks," "endeavor,"
"potential," "continue" or the negative of these terms or other comparable
terminology. Forward-looking statements appear in a number of places in this
Quarterly Report on Form
10-Q
and include, but are not limited to, statements about:

     •    our expectation that our existing capital resources will be sufficient to
          enable us to fund our currently planned development of
          MGTA-117,
          MGTA-145
          and our other product candidates;



     •    the anticipated benefits of our revised operating plan and our
          expectation that our existing cash, cash equivalents and marketable
          securities will enable us to fund our operating expenses and capital
          expenditure requirements into the second quarter of 2024;



  •   the initiation, timing and success of clinical trials of
      MGTA-117,
      MGTA-145
      and any other product candidates;



     •    our ability to commence and enroll patients in our clinical trials at the
          pace that we project;



     •    regulatory actions with respect to our product candidates or our
          competitors' products and product candidates;



  •   the outcomes of our preclinical studies;



     •    our ability to manufacture
          MGTA-117,
          MGTA-145
          or any other product candidate in conformity with the U.S. Food and Drug
          Administration's requirements and to scale up manufacturing of our
          product candidates to commercial scale, if approved;



     •    whether the results of our trials will be sufficient to support domestic
          or foreign regulatory approvals for
          MGTA-117,
          MGTA-145
          or any other product candidates we may develop;



  •   our reliance on third parties to conduct our clinical trials;



     •    our reliance on third-party contract development and manufacturer
          organizations to manufacture and supply our product candidates for us;



     •    our ability to establish clinical programs moving forward in multiple
          indications, with a rapidly advancing portfolio and sustainable platform;



     •    our ability to obtain, including on an expedited basis, and maintain
          regulatory approval of
          MGTA-117,
          MGTA-145
          or any other product candidates we may develop;



     •    the level of expenses related to any of our product candidates or
          clinical development programs;



  •   the benefits of the use of
      MGTA-117,
      MGTA-145
      or any other product candidate, if approved;



  •   our ability to successfully commercialize
      MGTA-117,
      MGTA-145
      or any other product candidates we may identify and pursue, if approved;



  •   the rate and degree of market acceptance of
      MGTA-117,
      MGTA-145
      or any other product candidates we may identify and pursue;



     •    our expectations regarding government and third-party payor coverage and
          reimbursement;



  •   our ability to obtain and maintain intellectual property protection for
      MGTA-117,
      MGTA-145
      or any other product candidates we may identify and pursue;



     •    our ability to obtain orphan drug designation for any of our product
          candidates we may identify and pursue;



     •    our ability to successfully build a specialty sales force and commercial
          infrastructure;



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     •    our ability to compete with companies currently producing or engaged in
          the clinical development of treatments for the disease indications that
          we pursue and treatment modalities that we develop;



     •    our ability to successfully find collaborators for any of our current and
          future programs and product candidates;



  •   our ability to retain and recruit key personnel;



     •    our estimates of our expenses, ongoing losses, future revenue, capital
          requirements and our needs for or ability to obtain additional financing;



     •    our expectations regarding the time during which we will continue to be
          an emerging growth company or smaller reporting company as defined in
          federal securities regulations;



  •   our financial performance; and



  •   developments and projections relating to our competitors or our industry.


Although we believe that the expectations reflected in these forward-looking
statements are reasonable, these statements relate to our strategy, future
operations, future financial position, future revenue, projected costs,
prospects, plans, objectives of management and expected market growth, and
involve known and unknown risks, uncertainties and other factors that may cause
our actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. You are
urged to carefully review the disclosures we make concerning these risks and
other factors that may affect our business and operating results under "Item 1A.
Risk Factors" in this Quarterly Report on Form
10-Q,
as well as our other reports filed with the Securities and Exchange Commission,
or the SEC, which disclosures are incorporated herein by reference. You are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this document. The Company does not intend, and
undertakes no obligation, to update any forward-looking information to reflect
events or circumstances after the date of this document or to reflect the
occurrence of unanticipated events, unless required by law to do so.

Overview

Magenta Therapeutics, Inc. is a clinical-stage biotechnology company developing novel medicines designed to bring the curative power of stem cell transplants to more patients with blood cancers, genetic diseases and autoimmune diseases.



Magenta's drug development pipeline includes multiple clinical and preclinical
product candidates designed to improve stem cell transplants. We are developing
product candidates that are designed to deplete targeted cells in the bone
marrow to make space for the bone marrow to receive newly transplanted stem
cells, a process known as conditioning. Our targeted conditioning programs are
intended to enhance the efficacy of and/or reduce the dosing levels, intensity
or, in some cases, even the need for chemotoxic agents. Our first targeted
conditioning program,
MGTA-117,
has entered clinical development in a Phase 1/2 trial, and our second program, a
CD45-antibody drug conjugate, or
CD45-ADC,
is advancing in preclinical development. In addition to our conditioning
programs, we are also developing a product candidate,
MGTA-145,
to improve the process by which stem cells are stimulated out of the bone marrow
and into the bloodstream so they are available for collection for future
reinfusion, known as mobilization, which is required for all transplants and
gene therapy applications.
MGTA-145
is a Phase 2 clinical stage program intended to enable rapid, reliable,
predictable and safe mobilization and collection of high numbers of functional
stem cells for transplant.

In addition to our product candidates, Magenta's research efforts are evaluating
several early-stage targets that include targeted lymphodepletion prior to
therapies such as chimeric antigen receptor
T-cells
or
CAR-T.
We also have a cell therapy program, E478, which is a small molecule aryl
hydrocarbon receptor, or AHR, antagonist designed to increase the numbers of
gene-modified HSCs for stem cell-based gene therapy and genome editing. In
December 2021, we notified Novartis International Pharmaceutical Ltd., or
Novartis, of our termination of the Novartis license related to our cell therapy
program,
MGTA-456,
which became effective 90 days from the date of notification.

Magenta intends to become a fully integrated discovery, development, and commercial company in the field of stem cell transplant. We are developing our product candidates to be used individually or, in some cases, in combination with each other or together with other therapies. As a result, our portfolio could be tailored to the patient's disease, such that a patient may receive more than one Magenta therapy as part of his or her individual stem cell transplant.

COVID-19

continues to present operational and other challenges which could delay or halt the development of our product candidates. See "Item 1A. Risk Factors" for further discussion of the current and expected impact on our business and product candidates.



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Since our inception in 2015, we have focused substantially all of our efforts
and financial resources on organizing and staffing our company, business
planning, raising capital, acquiring and developing our technology, identifying
potential product candidates, and undertaking preclinical studies and clinical
trials, including
MGTA-117
and
MGTA-145.
We do not have any products approved for sale and have not generated any revenue
from product sales.

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Net losses were $23.0 million for the three months ended March 31, 2022 and $71.1 million for the year ended December 31, 2021. As of March 31, 2022, we had an accumulated deficit of $348.5 million. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We expect our expenses and capital requirements will increase in connection with our ongoing activities, particularly as we:



  •   initiate, enroll and conduct a Phase 1/2 clinical trial for
      MGTA-117
      and Phase 2 clinical trial for
      MGTA-145;



     •    initiate and conduct preclinical studies and clinical trials of our other
          product candidates;



  •   develop any other future product candidates we may choose to pursue;



     •    seek marketing approval for any of our product candidates that
          successfully complete clinical development, if any;



  •   maintain compliance with applicable regulatory requirements;



     •    develop and scale up our capabilities to support our ongoing preclinical
          activities and clinical trials for our product candidates and
          commercialization of any of our product candidates for which we obtain
          marketing approval, if any;



  •   maintain, expand, protect and enforce our intellectual property portfolio;



     •    develop and expand our sales, marketing and distribution capabilities for
          our product candidates for which we obtain marketing approval, if any;
          and



     •    expand our operational, financial and management systems and increase
          personnel, including to support our clinical development and
          commercialization efforts and our operations as a public company.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. If we obtain regulatory approval for any of our product candidates, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing and distribution. Further, we expect to incur additional costs associated with operating as a public company.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing and distribution or licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. Additionally, because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to accurately predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. Accordingly, if we fail to raise capital or enter into necessary strategic agreements, or fail to ever become profitable, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates, and we may also be forced to reduce or terminate our operations.

As of March 31, 2022, we had cash, cash equivalents and marketable securities of $156.6 million. Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2024. See "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources."

Recent Developments



On April 14, 2022, we announced our plan to more narrowly focus our capital
allocation on the
MGTA-117
targeted conditioning program, the
CD45-ADC
(antibody-drug conjugate)
IND-enabling
activities and the
MGTA-145
stem cell mobilization efforts in sickle cell disease while also
de-prioritizing
other portfolio investments. We made certain reductions in our planned spending
related to research platform-related investments in new disease targets, paused
certain
MGTA-145
investments, including the program's planned
MGTA-145
dosing and administration optimization clinical trial in healthy subjects and
reduced planned general and administrative expenses. In connection with these
reductions to our planned spending, we also reduced our workforce by 14%. Our
revised operating plan allows us to extend our cash runway into the second
quarter of 2024.

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Impact of the
COVID-19
Pandemic

The
COVID-19

pandemic, including the emergence of various variants, has caused and could continue to cause significant disruptions to the U.S., regional and global economies and has contributed to significant volatility and negative pressure in financial markets.



We have been carefully monitoring the
COVID-19
pandemic and its potential impact on our business and have taken important steps
to help ensure the safety of our employees and their families and to reduce the
spread of
COVID-19
in the Cambridge community. We have established a hybrid work-from-home policy
for all employees, as well as safety measures for those using our offices and
laboratory facilities that are designed to comply with applicable federal, state
and local guidelines instituted in response to the
COVID-19
pandemic. We will continue to assess those measures as
COVID-19-related
guidelines evolve. We have also maintained efficient communication with our
partners and clinical sites as the
COVID-19
pandemic has progressed. We have taken these precautionary steps while
maintaining business continuity so that we can continue to progress our
programs.

The future impact of the
COVID-19
pandemic on our industry, the healthcare system and our current and future
operations and financial condition will depend on future developments, which are
highly uncertain and cannot be predicted with confidence. These developments may
include, without limitation, changes in the scope, severity and duration of the
pandemic, the actions taken to contain the pandemic or mitigate its impact,
including the adoption, administration and effectiveness of available
COVID-19
vaccines, the effect of any relaxation of current restrictions within the
Cambridge community or regions in which our partners and clinical sites are
located and the direct and indirect economic effects of the pandemic and
containment measures. See "Item 1A. Risk Factors" for a discussion of the
potential adverse impact of
COVID-19
on our business, results of operations and financial condition.

Components of Our Results of Operations

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our drug discovery efforts, and the development of our product candidates, which include:



     •    employee-related expenses, including salaries and related costs, and
          stock-based compensation expense, for employees engaged in research and
          development functions;



     •    expenses incurred in connection with the preclinical and clinical
          development of our product candidates, including under agreements with
          contract research organizations, or CROs;



     •    the cost of consultants and third-party contract development and
          manufacturing organizations, or CDMOs, that manufacture drug products for
          use in our preclinical studies and clinical trials;



     •    facilities, depreciation and other expenses, which include direct and
          allocated expenses for rent and maintenance of facilities, insurance and
          supplies; and



  •   payments made under third-party licensing agreements.

We expense research and development costs to operations as incurred. Advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed.

Our direct research and development expenses are tracked on a program-by-program basis and consist primarily of external costs, such as fees paid to consultants, central laboratories, contractors, CDMOs and CROs in connection with our preclinical and clinical development activities. We do not allocate employee costs, costs associated with our platform technology or facility expenses, including depreciation or other indirect costs, to specific product development programs because these costs are deployed across multiple product development programs and, as such, are not separately classified.

The successful development and commercialization of our product candidates is highly uncertain. This is due to the numerous risks and uncertainties, including the following:



  •   successful completion of preclinical studies and clinical trials;



     •    receipt and related terms of marketing approvals from applicable
          regulatory authorities;



     •    raising additional funds necessary to complete clinical development of
          and commercialize our product candidates;



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     •    obtaining and maintaining patent, trade secret and other intellectual
          property protection and regulatory exclusivity for our product
          candidates;



     •    making arrangements with third-party manufacturers, or establishing
          manufacturing capabilities, for both clinical and commercial supplies of
          our product candidates;



  •   developing and implementing marketing and reimbursement strategies;



     •    establishing sales, marketing and distribution capabilities and launching
          commercial sales of our products, if and when approved, whether alone or
          in collaboration with others;



     •    acceptance of our products, if and when approved, by patients, the
          medical community and third-party payors;



  •   effectively competing with other therapies;



  •   obtaining and maintaining third-party coverage and adequate reimbursement;



  •   protecting and enforcing our rights in our intellectual property portfolio;



     •    maintaining a continued acceptable safety profile of the products
          following approval; and



     •    the continuing impact of the
          COVID-19
          pandemic on our industry, the healthcare system, and our current and
          future operations.

A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any of our product candidates.

Research and development activities are central to our business model. 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 and duration of later-stage clinical trials. We expect research and development costs to increase significantly for the foreseeable future as our product candidate development programs progress. However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.

Inflation generally affects us by increasing our cost of labor and clinical trial costs. While we do not believe that inflation had a material effect on our financial condition and results of operations during the periods presented, it may result in increased costs in the foreseeable future.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs, and stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include direct and allocated facility-related costs and insurance costs, as well as professional fees for legal, patent, consulting, accounting and audit services.

Interest and Other Income, Net

Interest and other income, net, consists of interest income and miscellaneous income and expense unrelated to our core operations.



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Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

The following table summarizes our results of operations for the three months ended March 31, 2022 and 2021:



                                     Three Months Ended March 31,
                                      2022                  2021            Change

                                                   (in thousands)
Operating expenses:
Research and development         $       16,547        $       11,728      $  4,819
General and administrative                7,287                 6,969           318

Total operating expenses                 23,834                18,697         5,137

Loss from operations                    (23,834 )             (18,697 )      (5,137 )
Interest and other income, net              884                 1,208          (324 )

Net loss                         $      (22,950 )      $      (17,489 )    $ (5,461 )

Research and Development Expenses



                                                    Three Months Ended March 31,
                                                      2022                 2021            Change

                                                                  (in thousands)
Direct research and development expenses by
program:
Conditioning                                     $        6,436       $        2,355      $  4,081
Mobilization                                              1,132                1,010           122
Cell therapy                                                 31                  399          (368 )
Unallocated expenses:
Personnel related (including stock-based
compensation)                                             5,888                4,540         1,348
Consultant (including stock-based
compensation)                                               277                  237            40
Facility related and other                                2,783                3,187          (404 )

Total research and development expenses $ 16,547 $ 11,728 $ 4,819





Expenses related to our conditioning program increased primarily due to an
increase of $2.4 million in costs related to
MGTA-117
and an increase of $1.5 million in costs related to
CD45-ADC.
The increase in
MGTA-117
was primarily due to costs incurred upon the achievement of a development
milestone under our collaboration agreement. The increase in
CD45-ADC
was primarily due to higher preclinical and manufacturing costs to support our
investigational new drug, or IND, enabling studies. Expenses related to our cell
therapy program decreased as result of the discontinuance of our
MGTA-456
program.

The increase in personnel related costs was due primarily to an increase in headcount in our research and development function partially offset by a decrease in stock-based compensation. Personnel related costs for the three months ended March 31, 2022 and 2021 included stock-based compensation expense of $0.5 million and $0.9 million, respectively. The decrease in facility related and other was primarily due to lower operating costs related to our Cambridge, Massachusetts facility.

General and Administrative Expenses



                                                    Three Months Ended March 31,
                                                     2022                 2021            Change

                                                                  (in thousands)
Personnel related (including stock-based
compensation)                                    $       3,452        $       3,270       $   182
Professional and consultant                              1,612                1,762          (150 )
Facility related and other                               2,223                1,937           286

Total general and administrative expenses $ 7,287 $ 6,969 $ 318

The increase in facility related and other was primarily due to higher recruiting costs partially offset by lower operating costs related to our Cambridge, Massachusetts facility.



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Interest and Other Income, Net

Interest income and other income, net for the three months ended March 31, 2022 consisted primarily of sublease income of $0.8 million and interest income of $0.1 million. Interest income and other income, net for the three months ended March 31, 2021 consisted primarily of sublease income of $1.2 million and interest income of less than $0.1 million. The decrease in sublease income of $0.4 million was due to the expiration of one of our two subleases in December 2021.

Liquidity and Capital Resources

Since our inception, we have incurred significant operating losses. We have not yet commercialized any of our product candidates and we do not expect to generate revenue from sales of any product candidates for several years, if at all. Since our initial public offering in June 2018, we have funded our operations primarily with proceeds from the sale of our common stock in both private and public offerings.



On August 8, 2019, we filed a shelf registration statement on Form
S-3,
or Shelf, with the SEC which covers the offering, issuance and sale by us of up
to an aggregate of $350.0 million of our common stock, preferred stock, debt
securities, warrants and/or units of any combination thereof. We simultaneously
entered into a sales agreement with Cowen and Company, LLC, as sales agent, to
provide for the issuance and sale by the Company of up to $100.0 million of our
common stock from time to time in
"at-the-market"
offerings under the Shelf, which we refer to as the ATM Program. The Shelf was
declared effective by the SEC on August 19, 2019. As of March 31, 2022, no sales
have been made pursuant to the ATM Program.

Cash Flows



The following table summarizes our sources and uses of cash for each of the
periods presented:

                                                           Three Months Ended March 31,
                                                            2022                  2021

                                                                  (in thousands)
Net cash used in operating activities                  $      (19,741 )      $      (16,774 )
Net cash provided by (used in) investing activities           (40,144 )               7,493
Net cash provided by financing activities                          -                    418

Net decrease in cash, cash equivalents and
restricted cash                                        $      (59,885 )      $       (8,863 )



Operating Activities

During the three months ended March 31, 2022, operating activities used
$19.7 million of cash, primarily resulting from our net loss of $23.0 million,
partially offset by
non-cash
charges of $3.2 million. Net cash used by changes in our operating assets and
liabilities for the three months ended March 31, 2022 was less than $0.1 million
and consisted of a decrease of $0.7 million in operating lease liabilities
partially offset by an increase of $0.5 million in accounts payable and accrued
expenses and other current liabilities and a decrease of $0.1 million in prepaid
expenses and other current assets.

During the three months ended March 31, 2021, operating activities used
$16.8 million of cash, primarily resulting from our net loss of $17.5 million
and net cash used by changes in our operating assets and liabilities of
$2.3 million, partially offset by
non-cash
charges of $3.0 million. Net cash used by changes in our operating assets and
liabilities for the three months ended March 31, 2021 consisted primarily of a
decrease of $2.2 million in accounts payable and accrued expenses and other
current liabilities.

Changes in accounts payable, accrued expenses and other current liabilities and prepaid expenses and other current assets in both periods were generally due to the timing of vendor invoicing and payments.

Investing Activities

During the three months ended March 31, 2022, net cash used by investing activities was primarily attributable to purchases of marketable securities of $40.1 million.

During the three months ended March 31, 2021, net cash provided by investing activities was primarily attributable to maturities of marketable securities of $7.5 million.



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Financing Activities

During the three months ended March 31, 2021, net cash provided by financing activities was $0.4 million consisting of proceeds from the exercise of stock options.

Funding Requirements

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials for our product candidates in development. As of March 31, 2022, we had cash, cash equivalents and marketable securities of $156.6 million. We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2024. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including those listed above.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, including sales under our ATM Program, debt financings, collaborations, strategic alliances, marketing and distribution arrangements, or licensing arrangements. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders' ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders' rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances, marketing and distribution arrangements, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product 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 or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Although we continue to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund our continuing operations, if at all.

Contractual Obligations and Commitments



During the three months ended March 31, 2022, there were no material changes to
our contractual obligations and commitments described in our Annual Report on
Form
10-K
for the year ended December 31, 2021, as filed with the SEC.

Recently Issued and Adopted Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Significant Judgments and Estimates



Our consolidated financial statements are prepared in accordance with generally
accepted accounting principles in the United States. The preparation of our
financial statements and related disclosures requires us to make estimates,
assumptions and judgments that affect the reported amount of assets,
liabilities, revenue, costs and expenses, and related disclosures. We believe
that of our critical accounting policies described under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-Critical Accounting Policies and Significant Judgments and Estimates"
in our Annual Report on Form
10-K
for the year ended December 31, 2021, on file with the SEC, the following
involve the most judgment and complexity:

  •   accrued research and development expenses; and



  •   stock-based compensation.

Accordingly, we believe the policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected.



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