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    PCVX   US92243G1085

VAXCYTE, INC.

(PCVX)
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VAXCYTE, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

11/10/2021 | 04:10pm EST
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our condensed financial statements
and related notes and other financial information included elsewhere in this
Quarterly Report on Form 10-Q and our audited financial statements and notes
thereto for the year ended December 31, 2020 filed with the Securities and
Exchange Commission, or the SEC, on March 29, 2021. This discussion and analysis
contains forward-looking statements based upon our current beliefs, plans and
expectations that involve risks, uncertainties and assumptions, such as
statements regarding our plans, objectives, expectations, intentions and
beliefs. Our actual results and the timing of events could differ materially
from those anticipated in these forward-looking statements as a result of
various factors, including those set forth under the section titled "Risk
Factors" and elsewhere in this Quarterly Report on Form 10-Q. You should
carefully read the "Risk Factors" section of this Quarterly Report on Form 10-Q
to gain an understanding of the important factors that could cause actual
results to differ materially from our forward-looking statements. Please also
see the section titled "Special Note Regarding Forward-Looking Statements."

Overview


We are a next-generation vaccine company seeking to improve global health by
developing superior and novel vaccines designed to prevent or treat some of the
most common and deadly infectious diseases worldwide. Our cell-free protein
synthesis platform enables us to design and produce protein carriers and
antigens, the critical building blocks of vaccines, in ways that we believe
conventional vaccine technologies currently cannot. Our pipeline includes
pneumococcal conjugate vaccine, or PCV, candidates that we believe are among the
most broad-spectrum PCV candidates currently in development, targeting the $7
billion global pneumococcal vaccine market. Our lead vaccine candidate is
VAX-24, a 24-valent investigational PCV. We anticipate submitting our initial
investigational new drug, or IND, application to the U.S. Food and Drug
Administration, or FDA, for VAX-24 in the first quarter of 2022, following the
anticipated completion of the remaining drug product testing and release, as
well as documentation of stability, and initiating our Phase 1/2 clinical
proof-of-concept study in adults thereafter. We expect to announce topline data
from this study between late 2022 and early 2023. Our second PCV candidate,
known as VAX-XP, leverages our scalable and modular platform and builds on the
technical proof of concept established by VAX-24 and, if approved, would expand
the breadth of coverage to at least 30 strains without compromising
immunogenicity due to carrier suppression. In addition to our PCV franchise, we
are developing VAX-A1, a novel conjugate vaccine candidate for Group A Strep,
and VAX-PG, a novel protein vaccine candidate targeting the keystone pathogen
responsible for periodontitis, and other discovery-stage programs.

Since June 30, 2021, key developments affecting our business include the following:

• Advanced VAX-24 IND-Enabling Activities: We continue to make significant

         progress with VAX-24, including the recent completion of the formal
         release of the 24 good manufacturing practice, or GMP, conjugated drug

substances, or DS, the good laboratory practice non-clinical toxicology

study and the manufacture (formulation, fill and finish) of the GMP drug

         product, or DP.




      •  Presented Preclinical Data Supporting the Potential of VAX-XP: The
         poster, "Development of a Next Generation 30+ Valent Pneumococcal
         Conjugate Vaccine (VAX-XP) Using Site-Specific Carrier Protein

Conjugation," presented at IDWeek 2021, evaluated the immunogenicity of

         VAX-XP, our PCV candidate with an expanded breadth of coverage, in New
         Zealand white rabbits. The key study findings presented include:




           ?  VAX-XP showed conjugate-like immune responses for all 31 serotypes,
              as demonstrated by IgG immune responses 14 days after both an
              initial and booster dose that were superior to 

polysaccharide-based

              vaccines and comparable to Prevnar 13.




           ?  All serotypes in VAX-XP elicited a T-cell dependent immune response
              as demonstrated by the increase in IgG titers post boost.




      •  Initiated VAX-A1 IND-Enabling Activities: We continue to advance

development of VAX-A1, a novel conjugate vaccine designed to prevent

infections caused by Group A Streptococcus pyogenes, or Strep, bacteria.

         Following the nomination of our final VAX-A1 vaccine candidate in the
         first quarter of 2021, we initiated IND-enabling studies in the second
         half of 2021, consistent with prior guidance.



• Enhanced Board of Directors with Appointment of Four Industry Veterans:

In October 2021, we appointed Dr. Carlos Paya, who serves as the Board

Chair, and Dr. Michael Kamarck to our board of directors. This followed

         the September 2021 board appointments of Annie Drapeau and Teri Loxam.
         These accomplished industry leaders have


                                       21
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deep experience across the biopharmaceutical and vaccine industries and

will provide additional skills and expertise as we advance and scale our

         business.




      •  Appointed Harp Dhaliwal as Senior Vice President, Commercial

Manufacturing & Supply Chain: In October 2021, Harp Dhaliwal joined as

Senior Vice President of Commercial Manufacturing and Supply Chain and a

member of the executive team. Mr. Dhaliwal has 25 years of experience in

engineering, operations strategy, manufacturing and supply chain, with

significant expertise in the healthcare industry. During his career, he

has led commercial manufacturing and supply chain for multiple products.

         Most recently, Mr. Dhaliwal served as Senior Vice President of Supply
         Chain, Manufacturing and Procurement at Dermira and transitioned to Eli

Lilly following the company's acquisition. In this role, he supported

Dermira's first product launch and successfully transitioned the cGMP

manufacturing network from clinical to commercial. Previously, Mr.

Dhaliwal was the Head of Manufacturing and Supply Chain at Medivation, an

oncology-focused company. Following Pfizer's acquisition of Medivation,

Mr. Dhaliwal led the operations integration. Previously, Mr. Dhaliwal had

         a long career at Biogen where he ultimately served as Biogen's Chief
         Procurement Officer, responsible for managing $3 billion of
         enterprise-wide spend. While at Biogen, he was also instrumental in
         transforming the manufacturing network, initiating the biosimilar
         business and other strategic initiatives. Mr. Dhaliwal has an MBA in

Science and Technology from Queen's University and a Bachelor of Chemical

         Engineering from the University of British Columbia.




      •  Expanded Scientific Advisory Board with Appointment of Dr. Emmanuel

Hanon: In July 2021, Vaxcyte added Dr. Emmanuel Hanon, a healthcare

veteran and the Global Head of R&D for Viome, to its Scientific Advisory

         Board. Previously, Dr. Hanon spent 20 years at GlaxoSmithKline, or GSK,
         in R&D roles of increasing responsibility, most recently serving as

Senior Vice President, Head of Vaccine R&D and a member of GSK's Vaccine

Executive Team. In this role, he oversaw more than 3,500 employees across

50 countries dedicated to the discovery, development and management

activities for GSK's vaccine efforts. Additionally, Dr. Hanon was

responsible for the shared science and technology platforms supporting

the entire vaccine business, managing technical development, clinical

immunology and preclinical stages of vaccine development. While at GSK,

he contributed to the innovation of many vaccines targeting human

papilloma virus, malaria, tuberculosis, seasonal and pandemic influenza,

shingles, meningitis and RSV. Dr. Hanon has a Ph.D. in Immunology,

Virology, and Vaccinology and a Doctorate in Veterinary Medicine from the

         University of Liège.




Since our inception in November 2013, we have devoted substantially all of our
resources to performing research and development, undertaking preclinical
studies and enabling manufacturing activities in support of our product
development efforts, acquiring and developing our technology and vaccine
candidates, organizing and staffing our company, establishing our intellectual
property portfolio and raising capital to support and expand such activities. We
do not have any products approved for sale and have not generated any revenue
from product sales. To date, we have financed our operations primarily with
proceeds from the sales of our redeemable convertible preferred stock and our
initial public offering, or IPO. In July 2021, we entered into an Open Market
Sales AgreementSM, or the ATM Sales Agreement, with Jefferies LLC, or Jefferies,
which provides that, upon the terms and subject to the conditions and
limitations set forth in the ATM Sales Agreement, we may elect to issue and
sell, from time to time, shares of our common stock having an aggregate offering
price of up to $150.0 million through Jefferies acting as our sales agent or
principal. Through September 30, 2021, we have raised approximately
$582.1 million in gross proceeds from the sale of our capital stock. We will
continue to require additional capital to develop our vaccine candidates and
fund operations for the foreseeable future. Accordingly, until such time as we
can generate significant revenue from sales of our vaccine candidates, if ever,
we expect to finance our cash needs through public or private equity or debt
financings, third-party (including government) funding and marketing and
distribution arrangements, as well as other collaborations, strategic alliances
and licensing arrangements, or any combination of these approaches.

We have incurred net losses in each year since inception and expect to continue
to incur net losses in the foreseeable future. Our net losses may fluctuate
significantly from quarter-to-quarter and year-to-year, depending in large part
on the timing of our preclinical studies, clinical trials and manufacturing
activities, and our expenditures on other research and development activities.
Our net loss was $26.6 million and $71.5 million for the three and nine months
ended September 30, 2021, respectively. As of September 30, 2021, we had an
accumulated deficit of $270.1 million. As of September 30, 2021, we had cash,
cash equivalents and investments of $318.3 million, which we believe will be
sufficient to fund our operating expenses and capital expenditure requirements
through at least the completion and announcement of the topline data from our
Phase 1/2 clinical proof-of-concept study of VAX-24 in adults, which we expect
between late 2022 and early 2023, and to continue to advance our pipeline of
other vaccine candidates.

                                       22
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We do not expect to generate any revenue from commercial product sales unless
and until we successfully complete development and obtain regulatory approval
for one or more of our vaccine candidates, which we expect will take a number of
years. We expect our expenses will increase substantially in connection with our
ongoing activities, as we:

• advance vaccine candidates through preclinical studies and clinical trials;



  • require the scale-up of our manufacturing capabilities;


      •  require the manufacture of supplies for our preclinical studies and
         clinical trials, in particular our lead vaccine candidate, VAX-24;


  • pursue regulatory approval of vaccine candidates;


  • hire additional personnel;


  • operate as a public company;

• acquire, discover, validate and develop additional vaccine candidates; and

• obtain, maintain, expand and protect our intellectual property portfolio.



We rely and will continue to rely on third parties to conduct our preclinical
studies and clinical trials and for manufacturing and supply of our vaccine
candidates. We have no internal manufacturing capabilities, and we will continue
to rely on third parties, of which the main suppliers are single-source
suppliers, for our preclinical and clinical trial materials. Given our stage of
development, we do not yet have a marketing or sales organization or commercial
infrastructure. Accordingly, if we obtain regulatory approval for any of our
vaccine candidates, we also would expect to incur significant commercialization
expenses related to product sales, marketing, manufacturing and distribution.

Because of the numerous risks and uncertainties associated with vaccine
development, we are unable to 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 revenue from the sale of our vaccines, we may not become
profitable. If we fail to become profitable or are unable to sustain
profitability on a continuing basis, then we may be unable to continue our
operations at planned levels and may be forced to reduce our operations.

Certain Significant Relationships

Sutro Biopharma


Vaxcyte was formed through its relationship with Sutro Biopharma, Inc., or Sutro
Biopharma, in 2013 by our co-founders with the goal of utilizing Sutro
Biopharma's proprietary XpressCF platform for protein synthesis in the field of
vaccines addressing infectious diseases.

In addition to receiving funding, we entered into a license agreement with Sutro
Biopharma, or the Sutro License, on August 1, 2014. The Sutro License was
amended on October 12, 2015 and again on May 9, 2018 and May 29, 2018. Under
this license, we received an exclusive, worldwide, royalty-bearing,
sublicensable license under Sutro Biopharma's patents and know-how relating to
cell-free expression of proteins to (i) research, develop, use, sell, offer for
sale, export, import and otherwise exploit specified vaccine compositions, such
rights being sublicensable, for the treatment or prophylaxis of infectious
diseases, excluding cancer vaccines, and (ii) manufacture, or have manufactured
by an approved contract manufacturing organization, such vaccine compositions
from extracts supplied by Sutro Biopharma pursuant to the Sutro Biopharma Supply
Agreement (as described below). We are obligated to use commercially reasonable
efforts to develop, obtain regulatory approval for and commercialize the vaccine
compositions. In consideration of the rights granted under the Sutro License, we
are obligated to pay Sutro Biopharma a 4% royalty on worldwide aggregate net
sales of vaccine products for human health and a 2% royalty on such net sales of
vaccine products for animal health. Such royalty rates are subject to specified
reductions, including standard reductions for third-party payments and for
expiration of relevant patent claims. Royalties are payable on a vaccine
composition-by-vaccine composition and country-by-country basis until the later
of expiration of the last valid claim in the licensed patents covering such
vaccine composition in such country and ten years after the first commercial
sale of such vaccine composition. In addition, we are obligated to pay Sutro
Biopharma a percentage in the low-double digits of any net sublicensing revenue
received for sublicense agreements executed before July 2020. Our obligation to
pay sublicense fees to Sutro Biopharma expired in July 2020.

                                       23

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In May 2018, we entered into a supply agreement, which we refer to as the Sutro
Biopharma Supply Agreement, with Sutro Biopharma pursuant to which we purchase
from Sutro Biopharma extract and custom reagents for use in manufacturing
non-clinical and certain clinical supply of vaccine compositions utilizing the
technology licensed under the Sutro License at prices not to exceed a specified
percentage above Sutro Biopharma's fully burdened manufacturing cost. If any
extracts or custom reagents do not meet the specifications and warranties
provided, then we will not have an obligation to pay for the non-conforming
product, and Sutro Biopharma will be obligated to replace the non-conforming
product within the shortest possible time with conforming product at our cost.
The term of the Sutro Biopharma Supply Agreement is from execution until the
later of July 31, 2021 and the date the parties enter into and commence
activities under the supply agreement unless extended through a subsequent
supply agreement for the supply of Extract and custom reagents for vaccine
compositions for Phase 3 and commercial uses as contemplated in the Supply
Agreement. In February 2021, we entered into an amendment to the Sutro Biopharma
Supply Agreement and extended the term to July 31, 2022.

For additional details regarding our relationship with Sutro Biopharma, see Note
14, "Related Party Transactions," to our condensed financial statements included
in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Lonza


In October 2016, we entered into a development and manufacturing services
agreement, as amended, with Lonza Ltd., or the Lonza DMSA, pursuant to which
Lonza Ltd., or Lonza, is obligated to perform services including manufacturing
process development and the manufacture of components for VAX-24, including the
polysaccharide antigens, our proprietary eCRM protein carrier and conjugated
drug substances.

In September 2017, we and Lonza agreed to defer the completion payments for any
stage that commenced after December 31, 2019 or had not been completed by
December 31, 2019 until the earlier of the completion of all IND-enabling
activities or December 31, 2020. In March 2020, Lonza agreed to defer the
completion payments until the earlier of the completion of all IND-enabling
activities or April 30, 2021. In April 2021, Lonza further agreed to defer 50%
of the completion payments until the earlier of the completion of all
IND-enabling activities or December 31, 2021.

In June 2018, we entered into a letter agreement with Lonza, pursuant to which
we agreed to certain terms for potential future payments in shares of our common
stock as partial satisfaction of future obligations to Lonza. Specifically, we
and Lonza agreed that the initial pre-IND cash payments made by us to Lonza
would be subject to a specified dollar cap, which we refer to as the Initial
Cash Cap. After the Initial Cash Cap has been reached, then at our election, we
would have the option to make any further pre-IND payments owed to Lonza in
cash, in shares of our common stock at then market prevailing prices, or a
combination of both, provided that (i) Lonza had the right to elect to receive
up to 25% of pre-IND payments in shares of our common stock, up to a maximum of
$2.5 million, and (ii) we had the right to issue no more than $10.0 million of
pre-IND payments in shares of our common stock. In April 2021, we reached the
Initial Cash Cap and notified Lonza that we would be exercising our option to
issue approximately $10.0 million in shares of our common stock as payment for a
portion of pre-IND payments due April 30, 2021. In June 2021, we issued 399,680
shares of our common stock to Lonza at a price of $25.02 per share to pay for
$10.0 million of the pre-IND payments due April 30, 2021.

In October 2018, we entered into a second development and manufacturing services
agreement with Lonza (the "Lonza 2018 DMSA," and together with the Lonza DMSA,
the "Lonza Agreements"), pursuant to which Lonza is obligated to perform
services including manufacturing process development and the manufacture and
supply of VAX-24 finished drug product.

Under the Lonza Agreements, we will pay Lonza agreed upon fees for Lonza's
performance of manufacturing services, and we will reimburse Lonza for its
out-of-pocket costs associated with purchasing raw materials, plus a customary
handling fee. Each Lonza Agreement is managed by a steering committee and any
dispute at the steering committee will be resolved by senior executives of the
parties.

Impact of COVID-19

We are continuing to closely monitor the impact of the global COVID-19 pandemic
on our business and are taking proactive efforts designed to protect the health
and safety of our employees and to maintain business continuity. We believe that
the measures we have implemented and continue to implement are appropriate, and
we will continue to monitor and seek to comply with guidance from governmental
authorities and adjust our activities as appropriate. Based on guidance issued
by federal, state and local authorities, we transitioned to a remote work model
for our non-lab based employees in March 2020, while maintaining essential
in-person laboratory functions in order to advance key research and development
initiatives, supported by the implementation of updated onsite safety
procedures, including routine testing of employees. We recently began to allow
non-lab based employees who have been fully vaccinated to return to the office
on a voluntary and limited basis.

                                       24

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In particular, the COVID-19 pandemic slowed raw material supply chains and
travel restrictions delayed the qualification of key analytical equipment used
in manufacturing and curtailed in-person contract manufacturing organization, or
CMO, oversight of manufacturing, affecting our manufacturing processes. As the
pandemic continues, we could see an additional impact on our ability to advance
our programs, obtain supplies from our contract manufacturers or interact with
regulators, ethics committees or other important agencies due to limitations in
regulatory authority, employee resources or otherwise. In any event, if the
COVID-19 pandemic continues and persists for an extended period of time, we
could experience significant disruptions to our development timelines, which
would adversely affect our business, financial condition, results of operations
and growth prospects.

In addition, while the potential economic impact brought by, and the duration
of, the COVID-19 pandemic may be difficult to assess or predict, the pandemic
could result in significant and prolonged disruption of global financial
markets, reducing our ability to access capital, which could in the future
negatively affect our liquidity. In addition, a recession or market correction
resulting from the continued spread of COVID-19 could materially affect our
business and the potential value of our common stock.

The extent of the impact of the COVID-19 pandemic on our development and
regulatory efforts, our ability to raise sufficient additional capital on
acceptable terms, if at all, and the value of and market for our common stock
will depend on future developments that are highly uncertain and cannot be
predicted with confidence at this time, such as the ultimate duration of the
pandemic, travel restrictions, quarantines, social distancing and business
closure requirements in the United States and in other countries, and the
effectiveness of actions taken globally to contain and treat COVID-19. For
additional information about risks and uncertainties related to the COVID-19
pandemic that may impact our business, financial condition and results of
operations, see the section titled "Risk Factors."

Components of Results of Operations

Operating Expenses

Research and Development


Research and development expenses represent costs incurred in performing
research, development and manufacturing activities in support of our own product
development efforts and include personnel-related costs (such as salaries,
employee benefits and stock-based compensation) for our personnel in research
and development functions; costs related to acquiring, developing and
manufacturing supplies for preclinical studies, clinical trials and other
studies, including fees paid to contract manufacturing organizations; costs and
expenses related to agreements with contract research organizations,
investigative sites and consultants to conduct non-clinical and preclinical
studies and clinical trials; professional and consulting services costs;
research and development consumables costs; laboratory supplies and equipment
costs; and facility and other allocated costs.

Research and development expenses are expensed as incurred. Non-refundable
advance payments for services that will be used or rendered for future research
and development activities are recorded as prepaid expenses and recognized as
expenses as the related services are performed. We do not allocate our costs by
vaccine candidates, as our vaccine candidates are at an early stage of
development and our research and development expenses include internal costs,
such as payroll and other personnel expenses, which are not tracked by vaccine
candidate. In particular, with respect to internal costs, several of our
departments support multiple vaccine candidate research and development
programs.

We expect our research and development expenses to increase substantially in
absolute dollars for the foreseeable future as we advance our vaccine candidates
into and through preclinical studies and clinical trials, pursue regulatory
approval of our vaccine candidates and expand our pipeline of vaccine
candidates. The process of conducting the necessary preclinical and clinical
research to obtain regulatory approval is costly and time-consuming. The actual
probability of success for our vaccine candidates may be affected by a variety
of factors, including the safety and efficacy of our vaccine candidates, early
clinical data, investment in our clinical programs, competition, manufacturing
capability and commercial viability. We may never succeed in achieving
regulatory approval for any of our vaccine candidates. As a result of the
uncertainties discussed above, we are unable to determine the duration and
completion costs of our research and development projects or if, when and to
what extent we will generate revenue from the commercialization and sale of our
vaccine candidates.

We accrue for costs related to research and development activities based on our
estimates of the services received and efforts expended pursuant to quotes and
contracts with vendors, including CMOs, that conduct research and development on
our behalf. The financial terms of these agreements are subject to negotiation,
vary from contract to contract and may result in uneven payment flows. There may
be instances in which payments made to our vendors exceed the level of services
provided and result in a prepayment of the research and development expense.
Advance payments for goods and services to be used in future research and
development activities are expensed when the activity has been performed or when
the goods have been received. We make significant judgments and estimates in
determining accrued research and development liabilities as of each reporting
period based on

                                       25
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the estimated time period over which services will be performed and the level of
effort to be expended. If the actual timing of the performance of services or
the level of effort varies from our estimate, we adjust the accrual or prepaid
expense accordingly.

Although we do not expect our estimates to be materially different from amounts
actually incurred, if our estimates of the status and timing of services
performed differ from the actual status and timing of services performed, it
could result in us reporting amounts that are too high or too low in any
particular period.

Our research and development costs may vary significantly based on factors such as:

• the costs and timing of our chemistry, manufacturing and controls, or

         CMC, activities, including fulfilling GMP-related standards and
         compliance, and identifying and qualifying a second supplier;

• the costs related to raw materials estimates from our third-party

manufacturing and supply partners;

• the cost of clinical trials of our vaccine candidates being greater than

we anticipate;

• changes in the standard of care on which a clinical development plan was

         based, which may require new or additional trials;


  • the number of sites included in the trials;


  • the countries in which the trials are conducted;

• delays in adding a sufficient number of trial sites and recruiting

         suitable volunteers to participate in our clinical trials;


  • the number of subjects that participate in the trials;


  • the number of doses that subjects receive;


  • subjects dropping out of a study or lost in follow-up;

• potential additional safety monitoring requested by regulatory agencies;


  • the duration of subject participation in the trials and follow-up;


  • the cost and timing of manufacturing our vaccine candidates;


  • the phase of development of our vaccine candidates; and


  • the efficacy and safety profile of our vaccine candidates.

General and Administrative


General and administrative expenses consist primarily of costs and expenses
related to personnel (including salaries, employee benefits and stock-based
compensation) in our executive, legal, finance and accounting, human resources
and other administrative functions; legal services, including relating to
intellectual property and corporate matters; accounting, auditing, consulting
and tax services; insurance; and facility and other allocated costs not
otherwise included in research and development expenses. We expect our general
and administrative expenses to increase substantially in absolute dollars for
the foreseeable future as we increase our headcount to support our continued
research and development activities and grow our business. We also anticipate
that we will incur increased expenses as a result of operating as a public
company, including expenses related to audit, legal, regulatory and tax-related
services associated with maintaining compliance with SEC rules and regulations
and those of any national securities exchange on which our securities are
traded, additional insurance expenses, investor relations activities and other
administrative and professional services.

                                       26

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Other Income (Expense), Net


Other income (expense), net includes interest expense incurred on our capital
leases for lab equipment, interest income earned from our cash, cash equivalents
and investments, grant income, gain (loss) from sale of investments, foreign
currency transaction gains (losses) related to our Swiss Franc cash and
liability balances (see Note 2, "Basis of Presentation and Summary of
Significant Accounting Policies," Note 3, "Fair Value Measurements and Fair
Value of Financial Instruments," and Note 7, "Redeemable Convertible Preferred
Stock," to our condensed financial statements included in Part I, Item 1 of this
Quarterly Report on Form 10-Q for more detail).

Grant Income


In July 2019, we received a cost-reimbursement research award from Combating
Antibiotic Resistant Bacteria Biopharmaceutical Accelerator, or CARB-X, a
public-private partnership funded under a Cooperative Agreement from Assistant
Secretary for Preparedness and Response/Biomedical Advanced Research and
Development Authority and by awards from Wellcome Trust, Germany's Federal
Ministry of Education and Research, the United Kingdom Global Antimicrobial
Resistance Innovation Fund and the Bill & Melinda Gates Foundation. In
connection with this funding, we entered into a cost-reimbursement sub-award
agreement with the Trustees of Boston University, the administrator of the
program, or the CARB-X agreement. CARB-X awarded us up to $1.6 million in
initial funding to advance the development of a universal vaccine to prevent
infections caused by Group A Strep Bacteria. In July 2020, the CARB-X agreement
was amended with the initial funding amount increased from $1.6 million to $2.7
million. In December 2020, we reached the maximum CARB-X funding limit for this
initial funding period, and subsequently submitted our funding proposal to
CARB-X for the next period under our agreement. In April 2021, we received
approval for the next phase of CARB-X development and executed the
cost-reimbursement sub-award agreement with the Trustees of Boston University in
August 2021. Pursuant to the CARB-X agreement, the award commits additional
funding of $3.2 million for IND-enabling activities and total potential funding
of up to $29.7 million (including the current $3.2 million award and the prior
$2.7 million award) upon the achievement of future VAX-A1 development
milestones. Separately, the National Institute of Health, or NIH, awarded us up
to $0.5 million in April 2021 to advance the development of a vaccine against
Shigella infection. Grant income pursuant to our award agreements is recognized
as we incur and pay qualifying expenses over the periods of the awards. We
recognized $0.3 and $0.8 million in grant income for funding research and
development during the three months ended September 30, 2021 and 2020,
respectively, and $0.7 million and $2.2 million for the nine months ended
September 30, 2021 and 2020, respectively. Grant income is included as a
component of Other income (expense), net in the condensed statements of
operations.

Results of Operations

Comparison of the Three Months Ended September 30, 2021 and 2020


The following table summarizes our results of operations for the periods
presented:



                                            Three Months Ended September 30,                  Change
                                               2021                   2020               $              %
                                                             (in thousands)
Operating expenses:
Research and development                 $         20,428       $         16,410     $    4,018           24.5 %
General and administrative                          6,523                  4,898          1,625           33.2 %
Total operating expenses                           26,951                 21,308          5,643           26.5 %
Loss from operations                              (26,951 )              (21,308 )       (5,643 )         26.5 %
Other income (expense), net:
Interest expense                                        -                      -              -              *
Interest income                                        90                     33             57          172.7 %
Grant income                                          299                    787           (488 )        (62.0 )%
Realized gain on marketable securities                  1                      -              1              *
Foreign currency transaction losses                   (54 )                 (530 )          476          (89.8 )%
Total other income (expense), net                     336                    290             46           15.9 %
Net loss                                 $        (26,615 )     $        (21,018 )   $   (5,597 )         26.6 %




* not meaningful


                                       27
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Operating Expenses

Research and Development Expenses


The following table summarizes our research and development expenses for the
periods presented:



                                            Three Months Ended September 30,                 Change
                                               2021                  2020               $              %
                                                             (in thousands)

Product and clinical development (1) $ 10,099 $ 10,711 $ (612 ) (5.7 )% Personnel-related

                                   4,305                 2,620          1,685           64.3 %
Professional and consulting services                1,153                 1,085             68            6.3 %
Research and development consumables                1,651                   475          1,176          247.6 %
Facility related and other allocated                2,173                   413          1,760          426.2 %
Laboratory supplies and equipment                     810                   732             78           10.7 %
Other (2)                                             237                   374           (137 )        (36.6 )%

Total research and development expenses $ 20,428 $ 16,410 $ 4,018

           24.5 %




(1) Includes expenses for third-party manufacturing and outsourced contract

services, including preclinical studies and outsourced assays.

(2) Includes travel-related expenses, warrant expense and other miscellaneous

    office expenses.




Research and development expenses increased by $4.0 million, or 24.5%, during
the three months ended September 30, 2021 compared to the corresponding period
in 2020. The increase of $1.7 million in personnel-related expenses was
primarily due to higher salaries, benefits and stock-based compensation expense
resulting from an increase in the number of options granted and the growth in
the number of employees to support our expanded activities in research and
development. The increase of $1.2 million in research and development
consumables was primarily related to costs incurred for extracts and reagents
during the third quarter of 2021 for our VAX-24 manufacturing scale-up and
VAX-XP activities. The increase of $1.8 million in facility related and other
allocated expenses was primarily related to increases in rent and lease expense
as well as headcount.

General and Administrative Expenses


General and administrative expenses increased by $1.6 million, or 33.2%, during
the three months ended September 30, 2021 compared to the corresponding period
in 2020. The increase was mainly due to increases of $1.2 million in
personnel-related expenses, which were related to higher salaries, benefits and
stock-based compensation expense resulting from an increase in the number of
options granted and the growth in the number of employees in our general and
administrative functions and $0.4 million in professional and consulting
services related primarily to compliance activities under the Sarbanes-Oxley Act
of 2002, as amended, or the Sarbanes-Oxley Act, and technology infrastructure
enhancements as a result of operating as a public company.

Other Income (Expense), Net


Other income (expense), net increased by less than $0.1 million, or 15.9%,
during the three months ended September 30, 2021 compared to the corresponding
period in 2020. The increase was primarily attributable to a reduction in
foreign currency losses of $0.5 million generated on Swiss Franc payables as a
result of the appreciation of the U.S. dollar against the Swiss Franc, partially
offset by a decrease of $0.5 million in grant income for the CARB-X program.

                                       28

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Comparison of the Nine Months Ended September 30, 2021 and 2020


The following table summarizes our results of operations for the periods
presented:



                                            Nine Months Ended September 30,                  Change
                                              2021                   2020               $              %
                                                            (in thousands)
Operating expenses:
Research and development                $         55,337       $         58,903     $   (3,566 )         (6.1 )%
General and administrative                        18,487                 11,225          7,262           64.7 %
Total operating expenses                          73,824                 70,128          3,696            5.3 %
Loss from operations                             (73,824 )              (70,128 )       (3,696 )          5.3 %
Other income (expense), net:
Interest expense                                      (7 )                   (7 )            -              -
Interest income                                      245                    212             33           15.6 %
Grant income                                         677                  2,152         (1,475 )        (68.5 )%
Realized gain on marketable                            2                    

-

securities                                                                                   2              *
Foreign currency transaction gains
(losses)                                           1,393                   (709 )        2,102              *
Total other income (expense), net                  2,310                  1,648            662           40.2 %
Net loss                                $        (71,514 )     $        (68,480 )   $   (3,034 )          4.4 %

_________________________________

* not meaningful

Research and Development Expenses


The following table summarizes our research and development expenses for the
periods presented:



                                             Nine Months Ended September 30,                 Change
                                               2021                  2020               $              %
                                                             (in thousands)

Product and clinical development (1) $ 26,746 $ 43,278 $ (16,532 ) (38.2 )% Personnel-related

                                  12,325                 6,718          5,607           83.5 %
Professional and consulting services                3,245                 3,117            128            4.1 %
Research and development consumables                4,792                 1,173          3,619          308.5 %
Facility related and other allocated                5,261                 2,153          3,108          144.4 %
Laboratory supplies and equipment                   2,377                 1,542            835           54.2 %
Other (2)                                             591                   922           (331 )        (35.9 )%

Total research and development expenses $ 55,337 $ 58,903 $ (3,566 ) (6.1 )%

_____________________________________________

(1) Includes expenses for third-party manufacturing and outsourced contract

services, including preclinical studies and outsourced assays.

(2) Includes travel-related expenses, warrant expense and other miscellaneous

office expenses.



Research and development expenses decreased by $3.6 million, or 6.1%, during the
nine months ended September 30, 2021 compared to the corresponding period in
2020. The decrease was primarily attributable to a decrease of $16.5 million in
product and clinical development expenses mainly related to our lead vaccine
candidate, VAX-24, which was driven by a $14.9 million decrease in costs related
to outsourced manufacturing activities and a $1.7 million decrease in outsourced
research services as a result of the completion of the eCRM and polysaccharide
GMP campaigns in 2020, partially offset by increases in VAX-24 drug substance,
drug product and manufacturing scale-up activities and VAX-XP activities in
2021. The increase of $5.6 million in personnel-related expenses was primarily
due to higher salaries, benefits and stock-based compensation expense related to
an increase in the number of options granted and the growth in the number of
employees to support our expanded activities in research and development. The
increase of $3.6 million in research and development consumables was primarily
due to costs incurred for extracts and reagents incurred during 2021 for our
VAX-24 manufacturing scale-up activities and VAX-XP program. The increase of
$3.1 million in facility related and other allocated expenses was primarily
related to increases in rent and lease expense, headcount and lab equipment
depreciation.

General and Administrative Expenses

                                       29

--------------------------------------------------------------------------------


General and administrative expenses increased by $7.3 million, or 64.7%, during
the nine months ended September 30, 2021 compared to the corresponding period in
2020. The increase was primarily attributable to increases of $5.4 million in
personnel-related expenses, which were related to higher salaries and benefits,
recruiting expense, employee development expense and stock-based compensation
expense resulting from an increase in the number of options granted and the
growth in the number of employees in our general and administrative functions,
$1.0 million in directors and officers insurance expense and $0.9 million in
professional and consulting services related primarily to compliance activities
under the Sarbanes-Oxley Act and technology infrastructure enhancements as a
result of operating as a public company.

Other Income (Expense), Net


Other income (expense), net increased by $0.7 million, or 40.2%, during the nine
months ended September 30, 2021 compared to the corresponding period in 2020.
The increase was primarily attributable to an increase of foreign currency gains
of $2.1 million generated by Swiss Franc payables resulting from the
depreciation of the U.S. dollar against the Swiss Franc on September 30, 2021
compared to December 31, 2020, partially offset by a decrease of $1.5 million in
grant income for the CARB-X program.

Liquidity and Capital Resources


We have incurred losses and negative cash flows from operations from inception
through September 30, 2021. We have funded our operations to date primarily
through equity financings totaling approximately $582.1 million in aggregate
gross proceeds and $557.3 million net of underwriting discounts, commissions and
offering expenses. As of September 30, 2021, we had $112.0 million of cash and
cash equivalents, $206.3 million in investments and an accumulated deficit of
$270.1 million.

On July 2, 2021, we filed a shelf registration statement on Form S-3ASR, or the
Shelf Registration Statement, under which we may, from time to time, sell
securities in one or more offerings of our common stock, preferred stock, debt
securities or warrants. The Shelf Registration Statement became automatically
effective upon the filing of the Form S-3ASR on July 2, 2021.

Future Funding Requirements


Our primary uses of cash are to fund our operations, which consist primarily of
research and development expenditures related to our programs and, to a lesser
extent, general and administrative expenditures. We anticipate that we will
continue to incur significant expenses for the foreseeable future as we continue
to advance our vaccine candidates, expand our corporate infrastructure,
including the costs associated with being a public company, further our research
and development initiatives for our vaccine candidates and scale our laboratory
and manufacturing operations. We are subject to all of the risks typically
related to the development of new drug candidates, and we may encounter
unforeseen expenses, difficulties, complications, delays and other unknown
factors that may adversely affect our business. We anticipate that we will need
substantial additional funding in connection with our continuing operations.

We believe that our existing cash, cash equivalents and investments as of the
date of this Quarterly Report on Form 10-Q will be sufficient to fund our
operating expenses and capital expenditure requirements through at least the
completion and announcement of the topline data from our Phase 1/2 clinical
proof-of-concept study of VAX-24 in adults, which we expect between late 2022
and early 2023, and to continue to advance our pipeline of other vaccine
candidates. However, we will need to raise additional capital prior to
commencing pivotal trials for any of our vaccine candidates. Until we can
generate a sufficient amount of revenue from the commercialization of our
vaccine candidates or from collaboration agreements with third parties, if ever,
we expect to finance our future cash needs through public or private equity or
debt financings, third-party (including government) funding and marketing and
distribution arrangements, as well as other collaborations, strategic alliances
and licensing arrangements, or any combination of these approaches.

The sale of equity or convertible debt securities may result in dilution to our
stockholders and, in the case of preferred equity securities or convertible
debt, those securities could provide for rights, preferences or privileges
senior to those of our common stock. Debt financings may subject us to covenant
limitations or restrictions on our ability to take specific actions, such as
incurring additional debt, making capital expenditures or declaring dividends.
Our ability to raise additional funds may be adversely impacted by deteriorating
global economic conditions and the recent disruptions to and volatility in the
credit and financial markets in the United States and worldwide resulting from
the ongoing COVID-19 pandemic. There can be no assurance that we will be
successful in acquiring additional funding at levels sufficient to fund our
operations or on terms favorable or acceptable to us. If we are unable to obtain
adequate financing when needed or on terms favorable or acceptable to us, we may
be forced to delay, reduce the scope of or eliminate one or more of our research
and development programs.

                                       30
--------------------------------------------------------------------------------

Our future capital requirements will depend on many factors, including:

• the timing, scope, progress, results and costs of research and

         development, testing, screening, manufacturing, preclinical and
         non-clinical studies and clinical trials, including any impacts related
         to the COVID-19 pandemic;


      •  the outcome, timing and cost of seeking and obtaining regulatory

approvals from the FDA and comparable foreign regulatory authorities,

including the potential for such authorities to require that we perform

field efficacy studies for our PCV candidates, require more studies than

those that we currently expect or change their requirements regarding the

data required to support a marketing application;

• the cost of building a sales force in anticipation of any product

commercialization;



      •  the costs of future commercialization activities, including product
         manufacturing, marketing, sales, royalties and distribution, for any of
         our vaccine candidates for which we receive marketing approval;


      •  our ability to maintain existing, and establish new, strategic
         collaborations, licensing or other arrangements and the financial terms
         of any such agreements, including the timing and amount of any future
         milestone, royalty or other payments due under any such agreement;


  • any product liability or other lawsuits related to our products;


• the revenue, if any, received from commercial sales, or sales to foreign

governments, of our vaccine candidates for which we may receive marketing

approval;

• the costs to establish, maintain, expand, enforce and defend the scope of

our intellectual property portfolio, including the amount and timing of

any payments we may be required to make, or that we may receive, in

connection with licensing, preparing, filing, prosecuting, defending and

         enforcing our patents or other intellectual property rights;


  • expenses needed to attract, hire and retain skilled personnel;


  • the costs of operating as a public company; and

• the impact of the COVID-19 pandemic, which may exacerbate the magnitude

of the factors discussed above.



A change in the outcome of any of these or other variables could significantly
change the costs and timing associated with the development of our vaccine
candidates. Furthermore, our operating plans may change in the future, and we
may need additional funds to meet operational needs and capital requirements
associated with such change.

At-the-Market Offering


In July 2021, we entered into the ATM Sales Agreement with Jefferies, which
provides that, upon the terms and subject to the conditions and limitations set
forth in the ATM Sales Agreement, we may elect to issue and sell, from time to
time, shares of our common stock having an aggregate offering price of up to
$150.0 million through Jefferies acting as our sales agent or principal. Under
the ATM Sales Agreement, Jefferies may sell the shares of common stock by any
method permitted by law deemed to be an "at-the-market offering" as defined
under the Securities Act of 1933, as amended, or the Securities Act, in block
transactions or in privately-negotiated transactions with our consent. Jefferies
will use commercially reasonable efforts to sell the shares of common stock
subject to the ATM Sales Agreement from time to time, based upon our
instructions (including any price, time or size limits or other customary
parameters or conditions that we may impose). We will pay Jefferies a commission
of up to 3.0% of the gross sales proceeds of any common stock sold through
Jefferies under the ATM Sales Agreement; however, we are not obligated to make
any sales of common stock. As of September 30, 2021, we have sold 498,502 shares
of our common stock under the ATM Sales Agreement at an average price of $25.15
per share for aggregate gross proceeds of $12.5 million ($12.2 million net of
commissions and offering expenses). As of September 30, 2021, we recorded
approximately $5.0 million of receivables in Prepaid expenses and other current
assets in the condensed balance sheet for net proceeds related to the sale of
common stock under the ATM Sales Agreement that had not been received as of
September 30, 2021.

                                       31

--------------------------------------------------------------------------------

Cash Flows

The following table summarizes our cash flows for the periods indicated:



                                                          Nine Months Ended September 30,
                                                            2021                   2020
                                                                  (in thousands)
Net cash used in operating activities                 $         (70,300 )     $       (35,860 )
Net cash used in investing activities                          (212,390 )                (383 )
Net cash provided by financing activities                         9,042     

374,315

Effect of exchange rate changes on cash and cash
equivalents                                                         363                     -
Net (decrease) increase in cash, cash equivalents
and restricted cash                                   $        (273,285 )     $       338,072



Cash Flows from Operating Activities


Net cash used in operating activities for the nine months ended September 30,
2021 was $70.3 million, which primarily resulted from a net loss of
$71.5 million and a net change in our operating assets and liabilities of
$9.6 million, partially offset by non-cash charges of $10.8 million. The net
change in operating assets and liabilities of $9.6 million was primarily due to
(i) an increase in prepaid and other current assets of $16.3 million related to
prepaid rent expenses resulting from the San Carlos office leasehold
improvements, (ii) an increase in other assets of $3.0 million related to assets
purchased to support manufacturing activities and (iii) a decrease in accrued
manufacturing expenses of $6.0 million resulting from timing of receipt of
invoices, partially offset by increases in accrued expenses of $8.4 million
related primarily to an increase in outsourced research services for the VAX-24
program and accounts payable of $5.6 million resulting from the timing of
payments. Non-cash charges primarily consisted of $7.6 million in stock-based
compensation expense and $1.3 million in depreciation and amortization.

Net cash used in operating activities for the nine months ended September 30,
2020 was $35.9 million, which primarily resulted from a net loss of
$68.5 million, partially offset by a net change in our operating assets and
liabilities of $27.6 million and non-cash charges of $5.1 million. The net
change in operating assets and liabilities of $27.6 million was primarily due to
increases in (i) accrued manufacturing expenses of $18.8 million related to
outsourced manufacturing activities, (ii) accounts payable of $7.3 million
resulting from the deferral of completion payments until April 2021 in
accordance with our contract with Lonza, (iii) accrued expenses of $1.4 million
related primarily to increases in contract research services associated with the
VAX-24 program and (iv) accrued compensation of $1.1 million. Non-cash charges
primarily consisted of $3.5 million in stock-based compensation expense and
$1.1 million in depreciation and amortization.

Cash Flows from Investing Activities


Cash used in investing activities for the nine months ended September 30, 2021
was $212.4 million, which related primarily to $295.3 million in purchases of
investments and $5.2 million in purchases of lab equipment, partially offset by
$58.0 million in maturities of investments and $30.1 million in sales of
investments.

Cash used in investing activities for the nine months ended September 30, 2020 was $0.4 million, which related primarily to purchases of lab equipment.

Cash Flows from Financing Activities


Cash provided by financing activities for the nine months ended September 30,
2021 was $9.0 million, which primarily consisted of net proceeds from shares
issued under our ATM Sales Agreement of $7.1 million and proceeds from exercises
of common stock options and shares issued under our employee stock purchase plan
of $1.9 million.

                                       32
--------------------------------------------------------------------------------


Cash provided by financing activities for the nine months ended September 30,
2020 was $374.3 million, which primarily consisted of net proceeds of $264.0
million from our IPO and $109.9 million from the issuance of our Series D
redeemable convertible preferred stock.

Contractual Obligations and Commitments


The following table summarizes our contractual obligations and commitments at
September 30, 2021:



                                                 Payments Due by Period
                                  Less                               More
                                  than       1 - 3      3 - 5        than
                                 1 Year      Years      Years       5 Years       Total
                                                     (in thousands)
Operating lease obligations(1)   $   142     $  762     $  495     $       -     $ 1,399
Purchase commitments(2)            1,338     $    -     $    -     $       -     $ 1,338
Total                            $ 1,480     $  762     $  495     $       -     $ 2,737



(1) Consists of our office lease in Palo Alto, California that is estimated to

expire in January 2022 and our office leases in Foster City, California that

expire in March 2022 and April 2022. The amount in the Less than 1 Year

column is net of lease incentives allocated to the Palo Alto office. The

amounts included in the 1-3 Years and 3-5 Years columns include lease

payments for the San Carlos office that are allocated to the Palo Alto office

as a result of accounting for the leases as a combined lease. See footnote 5,

"Leases" under Part I, Item 1 of this Quarterly Report on Form 10-Q.

(2) Consists of $1.3 million non-cancellable reservation fee for contingent

VAX-24 manufacturing campaign, which was recorded in Accrued manufacturing

    expenses.




The contractual obligations table above does not include lease payments
allocated to the San Carlos office of approximately $25.1 million to be paid
over the four years beginning with the rent commencement date of the lease.
Lease payments for the San Carlos office will be finalized upon the rent
commencement date of the lease, which we anticipate will occur by the end of
2021 or early 2022.

We have certain payment obligations under various license agreements. Under
these agreements, we are required to make milestone payments upon successful
completion and achievement of certain intellectual property, clinical,
regulatory and sales milestones. The payment obligations under the license
agreements are contingent upon future events such as our achievement of
specified development, clinical, regulatory and commercial milestones, and we
will be required to make development milestone payments and royalty payments in
connection with the sale of products developed under these agreements. As the
achievement and timing of these future milestone payments are not probable or
estimable, such amounts have not been included in our balance sheets as of
September 30, 2021 or December 31, 2020, or in the contractual obligations table
above. See Note 14, "Related Party Transactions," to our condensed financial
statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We enter into agreements in the normal course of business with vendors for
preclinical and non-clinical studies, manufacturing and supply of our
preclinical materials and for other services and products used for operating
purposes. These contracts are generally cancelable following a certain period
after written notice, and therefore, we believe that our non-cancelable
obligations under these agreements are not material and have not been included
in the table above.

Legal Contingencies

From time to time, we may become involved in legal proceedings arising from the
ordinary course of business. We record a liability for such matters when it is
probable that future losses will be incurred and that such losses can be
reasonably estimated. Significant judgment by us is required to determine both
probability and the estimated amount. We do not believe that there is any
litigation or asserted or unasserted claim pending that could, individually or
in the aggregate, have a material adverse effect on our results of operations or
financial condition.

Off-Balance Sheet Arrangements

During the periods presented we did not have, nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the SEC.


                                       33

--------------------------------------------------------------------------------

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 condensed financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these condensed financial
statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities and expenses and the disclosure of contingent
assets and liabilities in our condensed financial statements. On an ongoing
basis, we evaluate our estimates and judgments, including those related to
accrued expenses and stock-based compensation. We base our estimates on
historical experience, known trends and events and various other factors that
are believed to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

Except as disclosed in Note 2, "Basis of Presentation and Summary of Significant
Accounting Policies" to our condensed financial statements included in Part I,
Item 1 of this Quarterly Report on Form 10-Q, there have been no significant
changes in our critical accounting policies during the nine months ended
September 30, 2021, as compared with those previously disclosed in our Annual
Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on
March 29, 2021.

Emerging Growth Company Status


We are an emerging growth company, as defined in the Jumpstart Our Business
Startups Act, or the JOBS Act. Under the JOBS Act, emerging growth companies can
delay the adoption of new or revised accounting standards issued subsequent to
the enactment of the JOBS Act until such time as those standards apply to
private companies. Other exemptions and reduced reporting requirements under the
JOBS Act for emerging growth companies include presentation of only two years of
audited financial statements in a registration statement for an initial public
offering, an exemption from the requirement to provide an auditor's report on
internal controls over financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act, an exemption from any requirement that may be adopted by the
Public Company Accounting Oversight Board regarding mandatory audit firm
rotation and less extensive disclosure about our executive compensation
arrangements. We have elected to use the extended transition period for
complying with new or revised accounting standards that have different effective
dates for public and private companies until the earlier of the date that (i) we
are no longer an emerging growth company or (ii) we affirmatively and
irrevocably opt out of the extended transition period provided in the JOBS Act.
However, as described in Note 3 to our financial statements included elsewhere
in this Quarterly Report on Form 10-Q, we early adopted certain accounting
standards, as the JOBS Act does not preclude an emerging growth company from
adopting a new or revised accounting standard earlier than the time that such
standard applies to private companies to the extent early adoption is permitted.
As a result, our financial statements may not be comparable to companies that
comply with the new or revised accounting pronouncements as of public company
effective dates. We will remain an emerging growth company until December 31,
2021.

Recently Adopted Accounting Pronouncements

See Note 2, "Basis of Presentation and Summary of Significant Accounting Policies," to our condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.

                                       34

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