MYOKARDIA, INC. You should read the following management's discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and notes thereto for the year endedDecember 31, 2019 , included in our Annual Report on Form 10-K for the year endedDecember 31, 2019 , filed with theU.S. Securities and Exchange Commission (SEC) onFebruary 27, 2020 (the "Annual Report").
Special note regarding forward-looking statements
This report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are often identified by the use of words such as, but not limited to, "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "intend," "may," "plan," "project," "seek," "should," "strategy," "target," "will," "would" and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" included under Part II, Item 1A below. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Overview
We are a clinical-stage biopharmaceutical company pioneering a precision medicine approach to discover, develop and commercialize targeted therapies for the treatment of serious cardiovascular diseases. Our goal is to be the world's leading precision cardiovascular medicine company. Precision medicine involves discovering and developing therapies that integrate clinical and molecular information based on the biological basis of disease. Our strategy is to identify homogenous subgroups of patients with a given cardiovascular disease, understand the causal factors underlying that subgroup's condition and develop targeted therapies designed to correct the common underlying defect leading to abnormal cardiac contraction or relaxation within each subgroup. Our lead clinical-stage candidate is mavacamten, a novel, oral, allosteric modulator of cardiac myosin being developed for the treatment of hypertrophic cardiomyopathy (HCM). Mavacamten is intended to reduce cardiac muscle contractility by inhibiting the excessive myosin-actin cross-bridge formation that underlies the excessive contractility, left ventricular hypertrophy and reduced compliance characteristic of HCM. In 2016, mavacamten was granted Orphan Drug Designation by theUnited States Food and Drug Administration (FDA) for the treatment of symptomatic obstructive HCM. InMay 2020 we announced positive top-line results from the pivotal Phase 3 EXPLORER-HCM study of mavacamten in patients with symptomatic, obstructive HCM. InJuly 2020 we announced that mavacamten had been granted Breakthrough Therapy Designation by the FDA. We plan to file a New Drug Application seeking regulatory approval of mavacamten for the treatment of obstructive HCM in the first quarter of 2021. In addition to the EXPLORER-HCM study of mavacamten, we are conducting a MAVA long-term extension (LTE) study of mavacamten, which will include patients from our Phase 3 EXPLORER-HCM study and the Phase 2 MAVERICK-HCM in non-obstructive HCM. InMarch 2020 , in order to protect the safety of study participants, investigators and staff, and to ensure consistent and appropriate clinical trial conduct in light of the COVID-19 pandemic, we temporarily suspended new patient enrollment in the MAVA-LTE study but enrollment resumed in the second quarter of 2020. MAVERICK-HCM is a Phase 2 clinical trial initiated in 2018 for the potential treatment of symptomatic non-obstructive HCM. InNovember 2019 , we reported positive top-line results and established safety and tolerability of mavacamten in non-obstructive HCM over a treatment period of 16 weeks. Additional data were reported inMarch 2020 . Meaningful reductions in biomarkers of cardiac stress were observed in patients receiving mavacamten versus those in the placebo cohort and clear signals of clinical benefit were noted in a subgroup with elevated cardiac filling pressures and in a pre-specified group of patients at higher risk for morbidity and mortality. Based on the safety and pharmacologic benefits observed in the MAVERICK-HCM study, we plan to advance mavacamten into additional studies in defined groups of patients with non-obstructive HCM and heart failure with preserved ejection fraction (HFpEF). 18 -------------------------------------------------------------------------------- InAugust 2020 , we announced the initiation of our Phase 3 VALOR-HCM clinical trial designed to evaluate mavacamten as a potential alternative to septal reduction therapy (SRT) in obstructive HCM patients. SRT is a highly invasive procedure consisting of a surgical or catheter-based therapy that eliminates or reduces the left ventricular outflow tract obstruction. The Phase 3 VALOR-HCM trial is a double-blind, placebo-controlled, multicenter study that will enroll approximately 100 individuals randomized 1:1 for a 16-week placebo-controlled period, with an interim analysis planned after 50 subjects have completed treatment through Week 16. We are also conducting PIONEER-OLE, an open label extension study of obstructive HCM patients from our Phase 2 PIONEER study. Data for twelve patients at 48 weeks of treatment with mavacamten were consistent with prior safety and efficacy observations at the 12, 24, and 36-week readouts. Highlights of the data included continued safety and tolerability and sustained clinical benefits, including reductions in left ventricular outflow tract (LVOT) gradient, improvements inNew York Heart Association functional class and improvement of multiple biomarkers toward normal ranges. A reduction in septal wall thickness, a defining characteristic of HCM, as well as an improvement in patient reported quality of life, as measured by the Kansas City Cardiomyopathy Questionnaire were also reported.
Our second clinical-stage candidate is danicamtiv, designed to increase the contractility of the heart (systolic function) with minimal or no effect on myocardial relaxation and compliance (diastolic function) by acting directly on the proteins in the heart muscle responsible for contraction.
InSeptember 2020 , we announced that the first patient had been dosed in our Phase 2 clinical trial of danicamtiv in people with primary dilated cardiomyopathy (DCM), thought to be caused by genetic mutations of the sarcomere. Topline data are anticipated in the second half of 2021, assuming conditions related to the COVID-19 pandemic continue to allow for enrollment and study conduct in line with current expectations. InJune 2020 , we announced interim results from a Phase 2a multiple-ascending dose clinical trial of danicamtiv in patients with stable heart failure. This trial follows the completion of two single-ascending dose Phase 1 studies in healthy volunteers and in patients with dilated cardiomyopathy, a disease of systolic dysfunction that can result in heart failure. In the Phase 2a study, danicamtiv was generally well-tolerated, and was associated with clinically meaningful improvements in left ventricular (LV) contractility, including statistically significant increases inLV stroke volume without impairing diastolic function (the heart's ability to relax and fill). Danicamtiv treatment also improved left atrial volume and function, a new and potentially important finding given that left atrial size is a well-established prognostic factor for atrial fibrillation. We expect to initiate a Phase 2 study in patients with systolic heart failure and paroxysmal or persistent atrial fibrillation in the first half of 2021. InAugust 2019 , we commenced dosing healthy volunteers in a Phase 1 study of small molecule MYK-224. InMarch 2020 , in response to the coronavirus pandemic, we paused new patient enrollment in the Phase 1 healthy volunteer study of MYK-224. We have since resumed patient enrollment in the study. The ultimate impacts of COVID-19 on our business are currently unknown. We will continue to actively monitor the situation and may take further precautionary and preemptive actions as may be required by federal, state or local authorities or that we determine are in the best interests of public health and safety and that of our patient community, employees, partners, suppliers and stockholders. We cannot predict the effects that such actions, or the impact of COVID-19 on global business operations and economic conditions may have on our business or strategy, including the effects on our ongoing and planned clinical development activities and prospects, or on our financial and operating results.
Financial Overview
We have not generated net income from operations and, as ofSeptember 30, 2020 , had an accumulated deficit of$845.0 million , primarily as a result of research and development and selling, general and administrative expenses. We have not generated any revenue from product sales since our inception and have funded our operations primarily through the issuance of equity securities, payments from Sanofi pursuant to a Collaboration Agreement with Sanofi that was terminated inDecember 2018 and payments from LianBio pursuant to an exclusive license agreement executed inAugust 2020 . We expect to incur significant and increasing losses from operations for the foreseeable future and we can provide no assurance that we will ever generate significant revenue or profits. As ofSeptember 30, 2020 , we have cash, cash equivalents and investments totaling$895.9 million .
Merger with Bristol-Myers Squibb
OnOctober 3, 2020 , we entered into an Agreement and Plan of Merger ("Merger Agreement") with Bristol-Myers Squibb Company, aDelaware corporation ("Bristol-Myers Squibb"), andGotham Merger Sub Inc. , aDelaware corporation and a wholly owned subsidiary of Bristol-Myers Squibb ("Merger Sub"). Under the terms of the Merger Agreement, and upon the terms and subject to the conditions thereof, Merger Sub has commenced a cash tender offer ("Tender Offer") to purchase all of the outstanding shares of our common stock for$225.00 per share, in cash, without interest and subject to applicable withholding tax. Following the completion of the Tender Offer, Merger Sub will be merged into our company, with our company surviving as a wholly owned subsidiary of 19 -------------------------------------------------------------------------------- Bristol-Myers Squibb. The acquisition is anticipated to close in the fourth quarter of 2020. If the Merger Agreement is terminated by us under specified circumstances, we will be required to pay Bristol-Myers Squibb a termination fee of$458.0 million . LianBio InAugust 2020 , we entered into an agreement (the "LianBio Agreement") with LianBio, a company incorporated in theCayman Islands , and its wholly owned subsidiary,LianBio Licensing, LLC . Under the LianBio Agreement, we granted an exclusive, royalty-bearing right and license to develop, have manufactured, commercialize, use, offer for sale, sell, have sold, and import mavacamten inChina and other territories inAsia (the "Territories"). LianBio will initially pursue a registration strategy for mavacamten inChina for obstructive HCM, with plans for additional indications to follow. The agreement provides for the supply and shipment of mavacamten by us. Due to the nature of the laws and regulatory environment inChina that will dictate how the companies will be able to operationalize the agreement, the nature of the relationship between LianBio and us cannot be determined until further commercial terms are negotiated. In connection with the LianBio Agreement, our Chief Executive Officer was appointed to LianBio's Board of Directors. Under the LianBio Agreement, we received a payment of$40.0 million at closing, with an additional$35.0 million unconditionally due 45 days after the earlier of six months following the date of the LianBio Agreement or a specified financing event for LianBio. The specified financing event occurred onOctober 29, 2020 . We also received a warrant to purchase 170,000 ordinary shares of Lian Cardiovascular, a wholly owned subsidiary of LianBio. The warrant is immediately exercisable at$275.00 per share, representing 17% of the ordinary shares of Lian Cardiovascular upon issuance. The warrant was recorded at a fair value of$18.7 million (see Note 4. Fair Value Measurements) on the date of issuance. We will be eligible to receive regulatory and sales milestone payments of up to$60.0 million and$87.5 million , respectively, as well as royalties ranging from low to upper teens on the sale of mavacamten in the Territories. The LianBio Agreement does not include a clinical development or commercial supply agreement, which would include pricing and delivery terms; however, it states that the agreements will be negotiated between the parties in good faith. The parties have also agreed that in the case ofChina , where a two invoice policy is required, we will use commercially reasonable efforts to distribute mavacamten directly or indirectly inChina . However, due to the regulatory requirements, such as the two invoice policy, the role LianBio will play in commercializing mavacamten remains to be decided by the parties. The LianBio Agreement provides that the commercial supply agreement will be negotiated within 90 days following the first submission of a new drug application for mavacamten in the Territories, currently anticipated to be no sooner than the fourth quarter of 2021.
Termination of Sanofi Collaboration
UntilDecember 31, 2018 we had an exclusive Collaboration Agreement with Sanofi. OnDecember 31, 2018 , Sanofi notified us of its intent to terminate our collaboration, specifically, Sanofi elected not to continue with the mavacamten, MYK-224 and danicamtiv programs. As a result, cost sharing and Sanofi's reimbursement of our research and development costs for mavacamten and MYK-224 ended in the first half of 2019. At that time Sanofi had continuing rights to royalties in the event of commercialization of the mavacamten and MYK-224 programs. InJuly 2019 , we repurchased those rights from Sanofi for$80.0 million . Neither we nor Sanofi have any material continuing rights or obligations under the Collaboration Agreement.
Financings
InMay 2020 , we completed a follow-on offering and issued 6,037,500 shares of common stock at a price of$105.00 per share, which included 787,500 shares sold directly to the underwriters upon exercise of their over-allotment option. We received proceeds totaling approximately$605.0 million from the offering, net of underwriting discounts, commissions and offering expenses. OnJanuary 3, 2020 , we entered into a sales agreement with a sales agent to establish an at-the-market (ATM) offering program, under which we are permitted to offer and sell, from time to time, shares of common stock having a maximum aggregate offering price of up to$200.0 million . As ofSeptember 30, 2020 , no securities have been issued pursuant to the ATM agreement.
Components of Operating Results
Operating Expense
Research and Development Expenses
Research and development expenses consist of salaries and benefits, including
stock-based compensation, lab supplies and facility costs and fees paid to
contract manufacturing organizations (CMOs) and clinical research organizations
(CROs) to conduct certain research and development activities on our behalf.
Research and development expenses are shown net of amounts that Sanofi agreed to
reimburse us under the cost sharing program for research and development
activities. Payments made prior to the receipt of goods or services are
capitalized until the goods or services are received.
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Research and development expenses incurred in the development and potential
commercialization of mavacamten, danicamtiv and other product candidates are
shown net of zero and $8.6 million in reductions in expense due to Sanofi
research and development reimbursements during the three months ended September
30, 2020 and 2019, respectively, and zero and $18.5 million during the nine
months ended September 30, 2020 and 2019, respectively, as follows (in
thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Mavacamten $ 25,207 $ 24,987 $ 78,132 $ 47,084
Danicamtiv 3,727 8,871 10,419 18,517
Stock-based compensation 5,621 3,644 16,152 10,402
Other 24,519 9,870 50,583 25,267
Total research and development expenses
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist principally of salaries and benefits, including stock-based compensation, professional fees for legal, consulting, audit and tax services, market research, rent and other general operating expenses not otherwise classified as research and development expenses.
Interest and Other Income, Net
Interest and other income, net consists primarily of interest income earned on our cash and cash equivalents, short-term investments and long-term investments.
Critical Accounting Estimates
See Part I, Item 7, "Critical Accounting Estimates" in our Annual Report. There have been no material changes to our critical accounting estimates disclosed in our Annual Report, except for the following.
Fair Value Measurement of Warrant Derivative Asset
We estimate the fair value of the warrant with a two-step process. On the date acquired, the fair value of the total stockholder's equity of Lian Cardiovascular was estimated using a discounted cash flow approach. The projected cash flows from Lian Cardiovascular are based on various assumptions, including projected revenues in the territories, potential development and commercial timeline, regulatory risks, and estimated costs to be incurred by Lian Cardiovascular for clinical trials, and selling and marketing expense. The cash flows are discounted at a rate commensurate with the level of risk associated with the projected cash flows. In the second step, the option pricing method was used to estimate the fair value of the warrant. Significant unobservable inputs include the risk-free rate of interest, volatility and estimated term of the warrant. Changes in these unobservable inputs and assumptions can materially affect the fair value. These inputs are subjective and generally require significant analysis and judgement to develop.
Results of Operations
Comparison of the Three Months Ended
The following table compares the operating results (in thousands):
Three Months Ended September 30, Change
2020 2019 $ %
Operating expenses:
Research and development $ 59,074 $ 47,372 $ 11,702 25 %
Selling, general and administrative 26,329 17,746 8,583 48 %
Repurchase of royalty rights - 80,000 (80,000 ) -100 %
Total operating expenses 85,403 145,118 (59,715 ) -41 %
Loss from operations (85,403 ) (145,118 ) 59,715 -41 %
Interest and other income, net 668 3,332 (2,664 ) -80 %
Income tax expense 9 16 (7 ) -44 %
Net loss $ (84,744 ) $ (141,802 ) $ 57,058 -40 %
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Research and Development Expenses
Research and development expenses increased$11.7 million , or 25%, from$47.4 million for the three months endedSeptember 30, 2019 to$59.1 million for the three months endedSeptember 30, 2020 . The increase in research and development expenses was primarily due to the following:
• a
partnership with Fulcrum;
• a
headcount;
• a
• a$2.0 million increase in stock compensation expense; • a$1.7 million increase in contract research; • a$1.5 million increase in professional and consultant fees; • a$0.7 million increase in medical affairs;
• offset by a
of the EXPLORER clinical trial and reduced activity due to the COVID-19
pandemic;
• a $2.9 million decrease in contract manufacturing;
• a $0.8 million decrease in preclinical and laboratory supplies; and
• a $0.5 million decrease in travel and other expenses.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased$8.6 million , or 48%, from$17.7 million for the three months endedSeptember 30, 2019 to$26.3 million for the three months endedSeptember 30, 2020 . The increase in selling, general and administrative expenses was primarily due to the following:
• a
• a
headcount;
• a $2.2 million increase in marketing expenses;
• a $1.1 million increase in stock compensation expense; and
• a $0.4 million increase in software, facilities and other;
• offset by a
research and education.
Interest and Other Income, Net
Interest and other income decreased$2.7 million , or 80%, from$3.3 million for the three months endedSeptember 30, 2019 to$0.7 million for the three months endedSeptember 30, 2020 . The decrease in interest income was primarily due to reduced interest rates on invested balances. 22 --------------------------------------------------------------------------------
Comparison of the Nine Months Ended
The following table compares the operating results (in thousands):
Nine Months Ended September 30, Change
2020 2019 $ %
Operating expenses:
Research and development $ 155,286 $ 101,270 $ 54,016 53 %
Selling, general and administrative 66,482 45,153 21,329 47 %
Repurchase of royalty rights - 80,000 (80,000 ) -100 %
Total operating expenses 221,768 226,423 (4,655 ) -2 %
Loss from operations (221,768 ) (226,423 ) 4,655 -2 %
Interest and other income, net 3,592 8,775 (5,183 ) -59 %
Income tax expense (benefit) 21 (202 ) 223 -110 %
Net loss $ (218,197 ) $ (217,446 ) $ (751 ) 0 %
Research and Development Expenses
Research and development expenses increased$54.0 million , or 53%, from$101.3 million for the nine months endedSeptember 30, 2019 to$155.3 million for the nine months endedSeptember 30, 2020 . The increase in research and development expenses was primarily due to the following:
• a
Sanofi;
• a
partnership with Fulcrum;
• a
headcount;
• a
• a$6.3 million increase in professional and consultant fees; • a$5.7 million increase in stock compensation expense; • a$1.3 million increase in medical affairs expense; and • a$1.3 million increase in contract research;
• offset by a
of the EXPLORER clinical trial and reduced activity due to the COVID-19
pandemic; and
• a $1.2 million decrease in contract manufacturing;
• a
• a
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased$21.3 million , or 47%, from$45.2 million for the nine months endedSeptember 30, 2019 to$66.5 million for the nine months endedSeptember 30, 2020 . The increase in selling, general and administrative expenses was primarily due to the following:
• a
• a
headcount;
• a $4.5 million increase in marketing expenses;
• a $3.3 million increase in stock compensation expense; and
• a $1.6 million increase in software, facilities and other;
• offset by a
research and education.
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Repurchase of Royalty Rights
In
Interest and Other Income, Net
Interest and other income decreased$5.2 million , or 59%, from$8.8 million for the nine months endedSeptember 30, 2019 to$3.6 million for the nine months endedSeptember 30, 2020 . The decrease in interest income was primarily due to reduced interest rates on invested balances.
Liquidity and Capital Resources
We consider the following when assessing our liquidity and capital resources (in
thousands):
September 30, December 31,
2020 2019
Cash and cash equivalents $ 675,541 $ 101,436
Short-term investments $ 220,338 $ 314,691
Long-term investments $ - $ 14,153
In May 2020 , we completed a follow-on offering and issued 6,037,500 shares of
common stock at a price of $105.00 per share, which included 787,500 shares sold
directly to the underwriters upon exercise of their over-allotment option. We
received proceeds totaling approximately $605.0 million from the offering, net
of underwriting discounts and commissions and offering expenses.
Since inception, we have funded our operations primarily through the issuance of
our equity securities and payments from Sanofi pursuant to the Collaboration
Agreement, which was terminated in December 2018 . All our investments are in
investment-grade securities.
On January 3, 2020 , we entered into a sales agreement with a sales agent to
establish an at-the-market (ATM) offering program, under which we are permitted
to offer and sell, from time to time, shares of common stock having a maximum
aggregate offering price of up to $200.0 million . As of September 30, 2020 , no
securities have been issued pursuant to the ATM agreement.
In March 2019 , we completed a follow-on offering in which we issued 5,663,750
shares of our common stock at a price of $51.00 per share, including 738,750
shares sold directly to the underwriters upon exercise of their option to
purchase up to 738,750 shares of our common stock within 30 days of the
offering. We received proceeds totaling approximately $271.2 million from the
offering, net of underwriting discounts, commissions and offering expenses.
We believe we have sufficient financial resources to meet our business
requirements for the 12 months following the date of this Quarterly Report on
Form 10-Q without giving effect to our potential acquisition by Bristol-Myers
Squibb and assuming we remain a standalone entity. If the potential acquisition
by Bristol-Myers Squibb is not completed, we expect to incur substantial
expenditures in the foreseeable future for the advancement of our precision
medicine platform, the development and potential commercialization of our
product candidates and the discovery, development and potential
commercialization of any additional product candidates we may pursue.
Furthermore, if our clinical trials for mavacamten are successful, or our other
product candidates, including danicamtiv, enter into late-stage clinical trials
or more advanced discovery and development stages, we may need to raise
additional capital in order to further advance our product candidates towards
regulatory approval. If the potential acquisition by Bristol-Myers Squibb is not
completed within the timeframe we currently expect, we will continue to seek
additional financing to develop our product candidates and fund operations for
the foreseeable future through equity or debt financings, collaborative or other
arrangements with corporate sources, or through other sources of financing.
Adequate additional funding may not be available to us on acceptable terms or at
all. If we raise additional funds by issuing equity securities, our stockholders
may experience dilution. Any debt financing into which we enter may impose upon
us additional covenants that restrict our operations, including limitations on
our ability to incur liens or additional debt, pay dividends, repurchase our
common stock, make certain investments and engage in certain merger,
consolidation or asset sale transactions. Any debt financing or additional
equity that we raise may contain terms that are not favorable to us or our
stockholders. If we are unable to raise additional funds when needed, we may be
required to delay, reduce, or terminate some or all of our development programs
and clinical trials. We may also be required to sell or license to other
technologies, product candidates or programs that we would prefer to develop and
commercialize ourselves.
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Cash Flows
The following table sets forth the primary sources and uses of cash for each of the periods presented below (in thousands):
Nine Months Ended September 30,
2020 2019
Net cash (used in) provided by:
Operating activities $ (142,240 ) $ (188,912 )
Investing activities 92,808 (96,770 )
Financing activities 623,912 274,797
Net increase in cash, cash equivalents and restricted cash
Operating Activities Net cash used in operating activities for the nine months endedSeptember 30, 2020 was$142.2 million . Net cash used in operating activities primarily consisted of payroll and benefits of$50.4 million , payments for accounts payable, accrued liabilities and other of$135.1 million , and a$12.5 million payment to Fulcrum under our collaboration agreement, offset by a receipt of$40.0 million , net from LianBio under our license agreement. Net cash used in operating activities for the nine months endedSeptember 30, 2019 was$188.9 million and was primarily due to the net loss for the period of$217.4 million , adjusted for non-cash stock-based compensation expense of$23.9 million and depreciation of$1.4 million less a$1.0 million amortization of discount on investments. Changes in working capital primarily consisted of an increase in accrued liabilities of$14.7 million , a$3.6 million increase in accounts payable, a$1.9 million increase in other long-term liabilities, and a$2.0 million decrease in operating lease right-of-use assets, offset by a reduction in prepayments from our collaboration partner of$13.0 million , a$2.5 million increase in prepaid expenses and other current assets, and a decrease in operating lease liabilities of$2.2 million .
Investing Activities
Cash provided by investing activities for the nine months endedSeptember 30, 2020 was$92.8 million and consisted of sales and maturities of investments of$4.0 million and$233.6 million , respectively, offset by cash outflows of$128.9 million in purchases of short-term investments and$15.9 million for leasehold improvements and purchases of equipment, which was related to the occupancy of our new corporate headquarters inBrisbane, California inJanuary 2020 . Cash used in investing activities for the nine months endedSeptember 30, 2019 consisted primarily of purchases of investments of$145.8 million and purchases of equipment of$2.0 million , offset by sales and maturities of investments of$4.0 million and$47.0 million , respectively.
Financing Activities
Cash provided by financing activities for the nine months ended
Cash provided by financing activities for the nine months endedSeptember 30, 2019 consisted primarily of proceeds from the issuance of common stock in connection with a follow-on offering of$271.2 million , net of underwriting discounts, commissions and offering costs, as well as proceeds from the issuance of common stock in connection with purchases pursuant to the Amended and Restated 2015 Employee Stock Purchase Plan and funds received as a result of common stock option exercises of$3.6 million .
Contractual Obligations and Commitments
InJune 2020 , we entered into a noncancelable operating sublease for approximately 34,500 square feet of office space at1200 Sierra Point Parkway ,Brisbane, California . The sublease will become effective upon Landlord's consent. We will become responsible for paying rent when the premises are ready for occupancy, currently anticipated to be in the first quarter of 2021. Future minimum rental payments during the nine-year lease term are$19.9 million in the aggregate. The sublease further provides that we are obligated to pay our share of certain costs, including taxes and operating expenses. As more fully disclosed in Note 3 to the footnotes to the condensed consolidated financial statements, inJuly 2020 , we entered into a license and collaboration agreement with Fulcrum Therapeutics, or Fulcrum, to discover, develop and commercialize novel 25 -------------------------------------------------------------------------------- targeted therapies for the treatment of genetic cardiomyopathy. We have made an upfront payment of$12.5 million to Fulcrum. We may pay specified research, development and commercial milestone payments and additional research reimbursements of up to$302.5 million for the first product to progress through development and commercialization. Except for the sublease and license and collaboration agreement discussed above, there have been no material changes to our contractual obligations during the nine months endedSeptember 30, 2020 , as compared to those disclosed in our Annual Report.
Off-Balance Sheet Arrangements
Since our inception, we have not engaged in any off-balance sheet arrangements,
as defined in the rules and regulations of the
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