10q10k10q10k.net

What changed in Lyra Therapeutics, Inc.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Lyra Therapeutics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+526 added−519 removedSource: 10-K (2024-03-22) vs 10-K (2023-03-29)

Top changes in Lyra Therapeutics, Inc.'s 2023 10-K

526 paragraphs added · 519 removed · 402 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

106 edited+18 added−9 removed151 unchanged
Biggest changePK Characterization Study Completed • 24 patients in the United States with bilateral 2,500 µg or 7,500 µg dose • Pharmacokinetic timepoints through 56 days, safety, SNOT-22 • LYR-210 delivered a constant daily dose of MF over 56 days without a drug burst • Steady state plasma concentrations were 41.2 pg/mL and 12.2 pg/mL in the 7,500 µg and 2,500 µg dose groups respectively • Clinically relevant improvement from baseline in SNOT-22 observed within 2 weeks • LYR-210 safe and well tolerated with no serious adverse events Phase 3 (ENLIGHTEN I) Initiated February 2022 • Randomized, blinded, sham-controlled, parallel-group clinical trial • 52-week trial duration: 24-week treatment period, followed by a safety extension period involving crossover treatment for control patients and 1:1 re-randomization to control or repeat treatment for LYR-210 patients • Approximately 180 adult CRS patients who have failed prior medical management and 2:1 randomization (bilateral LYR-210 7,500 µg): sham procedure • Up to 60 sites worldwide • Primary endpoint: Change from baseline in composite score of 7-day average of 3 cardinal symptoms at week 24 • Secondary objectives: Change from baseline in individual cardinal symptoms at week 24, CFBL in CT sinus opacification score at week 24, CFBL in SNOT-22 at week 24, rescue treatment use through week 24 • Recruiting Phase 3 (ENLIGHTEN II) Initiated September 2022 • Randomized, blinded, sham-controlled, parallel-group clinical trial • 24-week treatment period • Approximately 180 adult CRS patients who have failed prior medical management 2:1 randomization (bilateral LYR-210 (7,500 µg)): sham procedure • Up to 60 sites worldwide • Primary endpoint: Change from baseline in composite score of 7-day average of 3 cardinal symptoms at week 24 • Secondary objectives: Change from baseline in individual cardinal symptoms at week 24, CFBL in CT sinus opacification score at week 24, CFBL in SNOT-22 at week 24, rescue treatment use through week 24 • Enrollment paused; expected to resume in the second quarter of 2023 Phase 3 The LYR-210 Phase 3 program consists of two pivotal trials – ENLIGHTEN I and ENLIGHTEN II.
Biggest changePK Characterization Study Completed • 24 patients in the United States with bilateral 2,500 µg or 7,500 µg dose • Pharmacokinetic timepoints through 56 days, safety, SNOT-22 • LYR-210 delivered a constant daily dose of MF over 56 days without a drug burst • Steady state plasma concentrations were 41.2 pg/mL and 12.2 pg/mL in 5 Trial Status Trial Design Trial Objectives Trial Results the 7,500 µg and 2,500 µg dose groups respectively • Clinically relevant improvement from baseline in SNOT-22 observed within 2 weeks • LYR-210 safe and well tolerated with no serious adverse events Phase 3 (ENLIGHTEN I) Initiated February 2022 • Randomized, blinded, sham-controlled, parallel-group clinical trial • 52-week trial duration: 24-week treatment period, followed by a safety extension period involving crossover treatment for control patients and 1:1 re-randomization to control or repeat treatment for LYR-210 patients • Approximately 180 adult CRS patients who have failed prior medical management and 2:1 randomization (bilateral LYR-210 7,500 µg): sham procedure • Up to 60 sites worldwide • Primary endpoint: Change from baseline in composite score of 7-day average of 3 cardinal symptoms at week 24 • Secondary objectives: Change from baseline in individual cardinal symptoms at week 24, CFBL in CT sinus opacification score at week 24, CFBL in SNOT-22 at week 24, rescue treatment use through week 24 • Enrollment completed in September 2023.
It includes allowed cases in Australia and Great Britain, along with pending applications in the U.S., Canada, Australia, Europe, Korea, Singapore, China, and Japan. The fourth lineage dates from 2021 and provides protection potentially until 2042, exclusive of possible patent term adjustments or extensions or other forms of exclusivity.
It includes allowed cases in Australia, Singapore, Korea, and Great Britain, along with pending applications in the U.S., Canada, Australia, Europe, China, and Japan. The fourth lineage dates from 2021 and provides protection potentially until 2042, exclusive of possible patent term adjustments or extensions or other forms of exclusivity.
Moreover, under the provisions of the Food and Drug Administration Safety and Innovation Act, a sponsor can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
Moreover, under the provisions of the Food and Drug Administration Safety and Innovation Act, a sponsor can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug that is 22 intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process, or after approval may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning or untitled letters, product 15 recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties.
Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process, or after approval may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties.
All treatment-related adverse events were generally mild to moderate in nature, other than one incident of increased viscosity of upper respiratory secretion in the 2,500 µg dose treatment arm, and in line with the known safety profile of MF. After 24 weeks, LYR-210 drug matrices were removed, and patients then underwent a 24-week post-treatment follow-up.
All treatment-related adverse events were generally mild to moderate in nature, other than one incident of increased viscosity of upper respiratory secretion in the 2,500 µg dose treatment arm, and in line with the known safety profile of MF. After 24 weeks, LYR-210 drug matrices were removed, and patients then underwent a 24-week post-treatment 8 follow-up.
For example, a pharmaceutical manufacturer may obtain five years of non-patent exclusivity 19 upon NDA approval of an NCE, which is a drug that contains an active moiety that has not been approved by FDA in any other NDA. An “active moiety” is defined as the molecule or ion responsible for the drug substance’s physiological or pharmacologic action.
For example, a pharmaceutical manufacturer may obtain five years of non-patent exclusivity upon NDA approval of an NCE, which is a drug that contains an active moiety that has not been approved by FDA in any other NDA. An “active moiety” is defined as the molecule or ion responsible for the drug substance’s physiological or pharmacologic action.
An applicant will also need to discuss with the Agency how to apply certain premarket requirements and post-marketing regulatory requirements, including conduct of clinical trials, adverse event reporting, and cGMPs, to their combination product. Preclinical Studies Preclinical studies include laboratory evaluation of product chemistry, toxicity, and formulation, as well as animal studies to assess potential safety and efficacy.
An applicant will also need to discuss with the Agency how to apply certain premarket requirements and post-marketing 18 regulatory requirements, including conduct of clinical trials, adverse event reporting, and cGMPs, to their combination product. Preclinical Studies Preclinical studies include laboratory evaluation of product chemistry, toxicity, and formulation, as well as animal studies to assess potential safety and efficacy.
Marketing Approval Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls, and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more 17 indications.
Marketing Approval Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls, and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
Even with 18 submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.
Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.
There were no reports of unexpected adverse events, or AEs, or local nasal AEs, including epistaxis, nasal burning, nasal dryness, nasal irritation, and nasal septal perforation during the 24-week MF local dosing treatment duration. Additionally, no change in morning serum cortisol levels or intraocular pressures were noted.
There were no reports of unexpected adverse events, or AEs, or local nasal AEs, including epistaxis, nasal burning, nasal dryness, nasal irritation, and nasal septal perforation during the 24-week 9 MF local dosing treatment duration. Additionally, no change in morning serum cortisol levels or intraocular pressures were noted.
Given that LYR-210 and LYR-220 can be administered in a brief, simple, in-office procedure requiring no additional equipment, we anticipate that our sales representatives’ time will primarily be directed at educating the ENT physicians around product attributes and patient selection.
Given that LYR-210 and LYR-220 can be administered in a simple, in-office procedure requiring no additional equipment, we anticipate that our sales representatives’ time will primarily be directed at educating the ENT physicians around product attributes and patient selection.
In March 2010, the Patient Protection and Affordable 22 Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively the ACA, was signed into law, which substantially changed the way healthcare is financed by both governmental and private insurers in the United States.
In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively the ACA, was signed into law, which substantially changed the way healthcare is financed by both governmental and private insurers in the United States.
The primary endpoint of both ENLIGHTEN I and ENLIGHTEN II is change from baseline (CFBL) at week 24 in the composite score of 3 cardinal symptoms (3CS) score. The 3CS are nasal blockage/obstruction/congestion, anterior/posterior nasal discharge, and facial pain/pressure.
The primary endpoint of both ENLIGHTEN I and ENLIGHTEN II is change from baseline (CFBL) at week 24 in the composite score of 3 cardinal symptoms (3CS) score. The 3CS are nasal blockage/obstruction/congestion, 6 anterior/posterior nasal discharge, and facial pain/pressure.
An IND automatically becomes effective, and a clinical trial proposed in the IND may begin 30 days after the FDA receives the IND, unless before 16 that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold.
An IND automatically becomes effective, and a clinical trial proposed in the IND may begin 30 days after the FDA receives the IND, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold.
We believe our 13 scientific knowledge, technology, and development capabilities provide us with substantial competitive advantages, but we face potential competition from multiple sources, including large pharmaceutical, biotechnology, specialty pharmaceutical, and, to a lesser degree, medical device companies.
We believe our scientific knowledge, technology, and development capabilities provide us with substantial competitive advantages, but we face potential competition from multiple sources, including large pharmaceutical, biotechnology, specialty pharmaceutical, and, to a lesser degree, medical device companies.
The trial consisted of three arms with a 1:1:1 randomization: (1) an experimental arm with bilateral placement of 2,500 µg of LYR-210, with 23 patients; (2) an experimental arm with bilateral placement of 7,500 µg of LYR-210, with 21 patients; and (3) a control arm with a bilateral sham procedure only, with 23 patients (see Figure 4, above).
The trial consisted of three arms with a 1:1:1 randomization: (1) an experimental arm with bilateral placement of 2,500 µg of LYR-210, with 23 patients; (2) an experimental arm with bilateral placement of 7,500 µg of LYR-210, with 21 patients; and (3) a control arm with a bilateral sham procedure only, with 23 patients (see Figure 3, above).
The processes for obtaining regulatory approvals in the United States and other countries, as appropriate, along with subsequent compliance with appropriate federal, state, local, and foreign statutes and regulations, require the expenditure of substantial time and resources. U.S.
The processes for obtaining regulatory approvals in the United States and other countries, as appropriate, along with subsequent compliance with appropriate federal, state, local, and foreign statutes and regulations, require the expenditure of substantial time and resources. 17 U.S.
In the treatment stage, patients are randomized 2:1 to receive LYR-210 (7,500 µg) or sham-procedure. At the end of the treatment stage, patients in the control group receive crossover LYR-210 treatment while patients in the 6 LYR-210 group are re-randomized 1:1 to either receive a crossover sham-procedure or a repeat treatment with LYR-210 (7,500 µg).
In the treatment stage, patients are randomized 2:1 to receive LYR-210 (7,500 µg) or sham-procedure. At the end of the treatment stage, patients in the control group receive crossover LYR-210 treatment while patients in the LYR-210 group are re-randomized 1:1 to either receive a crossover sham-procedure or a repeat treatment with LYR-210 (7,500 µg).
Other Healthcare and Data Privacy and Security Laws Pharmaceutical and medical device manufacturers are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their 21 business.
Other Healthcare and Data Privacy and Security Laws Pharmaceutical and medical device manufacturers are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business.
Securities and Exchange Commission, or the SEC, and are available through the “Investors” portion of our website free of charge as soon as 23 reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Securities and Exchange Commission, or the SEC, and are available through the “Investors” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We intend to deploy a market access team to educate payors on the clinical and pharmacoeconomic attributes of our products and to seek to secure favorable coverage policies and to maximize the covered lives that have reimbursement for our products.
We intend to deploy a market access team to educate payors on the clinical and pharmacoeconomic attributes of our products and to secure favorable coverage policies and to maximize the covered lives that have reimbursement for our products.
The FDA and other authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.
The FDA 23 and other authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.
Total Symptom Improvement by 4CSS for Phase 2 LANTERN Clinical Trial. Furthermore, the 7,500 µg dose of LYR-210 achieved statistically significant improvement in SNOT-22 score in favor of the treatment arm as measured by the change from baseline at week 8 (-12.2) (p=0.039), week 16 (-15.0) (p=0.008), week 20 (-18.4) (p=0.001), and week 24 (-19.0) (p=0.001) (see Figure 6, below).
Total Symptom Improvement by 4CSS for Phase 2 LANTERN Clinical Trial. Furthermore, the 7,500 µg dose of LYR-210 achieved statistically significant improvement in SNOT-22 score in favor of the treatment arm as measured by the change from baseline at week 8 (-12.2) (p=0.039), week 16 (-15.0) (p=0.008), week 20 (-18.4) (p=0.001), and week 24 (-19.0) (p=0.001) (see Figure 5, below).
The primary objective of the study was to establish the PK profile of LYR-210 (see Figure 7, below). The study enrolled 24 patients, half of whom received LYR-210 2,500 µg and the other half received LYR-210 7,500 µg.
The primary objective of the study was to establish the PK profile of LYR-210 (see Figure 6, below). The study enrolled 24 patients, half of whom received LYR-210 2,500 µg and the other half received LYR-210 7,500 µg.
Moreover, we believe patients may also benefit from the biocompatible, flexible structure of LYR-210 and LYR-220 that is designed to maximize comfort over the therapy period. • Physician Experience : LYR-210 and LYR-220 are designed to enable physicians to perform the placement of LYR-210 and LYR-220 in-office in conjunction with an endoscopy procedure, thereby making the placement aligned with the existing care continuum for CRS patients and eliminating the need for physicians to schedule separate surgical time.
Moreover, we believe patients may also benefit from the bioabsorbable, flexible structure of LYR-210 and LYR-220 that is designed to maximize comfort over the therapy period. • Physician Experience : LYR-210 and LYR-220 are designed to enable physicians to perform the placement of LYR-210 and LYR-220 in-office in conjunction with an endoscopy procedure, thereby making the placement aligned with the existing care continuum for CRS patients and eliminating the need for physicians to schedule separate surgical time.
MF, the active ingredient in various FDA-approved drugs, has a well-established efficacy and safety profile, which we believe will support the development process for LYR-210. LYR-210 is designed to enable sustained drug delivery at difficult-to-access nasal inflammation sites without the need for patient compliance, while avoiding the systemic side effects associated with oral steroids.
MF, the active ingredient in various FDA-approved drugs, has a well-established efficacy and safety profile, which we believe will support the development process for LYR-210. LYR-210 is designed to enable continuous drug delivery at difficult-to-access nasal inflammation sites without the need for patient compliance, while avoiding the systemic side effects associated with oral steroids.
The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality, and purity of the final product.
The manufacturing process 19 must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality, and purity of the final product.
Further, we believe our studies have shown that LYR-210 has the potential to be an effective treatment for both patients with and without polyps.
Further, we believe our studies have shown that LYR-210 has the potential to be an effective treatment for both CRS patients with and without polyps.
We also rely 14 upon trademarks to build and maintain the integrity of our brand, and we seek to protect the confidentiality of trade secrets that may be important to the development of our business.
We also rely upon trademarks to build and maintain the integrity of our brand, and we seek to protect the confidentiality of trade secrets that may be important to the development of our business.
In particular, the improvement of the 7,500 µg dose of LYR-210 at week 24 over the control group (-19.0) was over two times the minimal clinically important difference of -8.9. 8 Figure 6. Total Symptom Improvement by SNOT-22 for Phase 2 LANTERN Clinical Trial. LYR-210 was observed to be safe and well-tolerated at all doses in the trial.
In particular, the improvement of the 7,500 µg dose of LYR-210 at week 24 over the control group (-19.0) was over two times the minimal clinically important difference of -8.9. Figure 5. Total Symptom Improvement by SNOT-22 for Phase 2 LANTERN Clinical Trial. LYR-210 was observed to be safe and well-tolerated at all doses in the trial.
We believe that the key potential benefits of our current investigational product portfolio, LYR-210 and LYR-220, include: • Clinical Activity : We believe LYR-210 and LYR-220 have the potential to significantly improve symptoms by maintaining a steady, high dose of MF at the site of inflammation for up to six months with a single administration. • Patient Compliance : Because drug delivery for LYR-210 and LYR-220 is designed to be sustained for up to six months with a single administration, the efficacy of LYR-210 and LYR-220 will not depend on patient compliance within the treatment period, unlike other CRS treatment options that require repeated daily administrations, such as topical intranasal steroids and oral steroids. • Patient Experience : LYR-210 and LYR-220 are designed to be administered via a simple, brief, non-invasive in-office procedure every six months, which is intended to enhance convenience for patients, unlike the repeated daily medical management and/or time-consuming and painful surgery required by certain other CRS treatment options.
We believe that the key potential benefits of our current investigational product portfolio, LYR-210 and LYR-220, include: • Clinical Activity : We believe LYR-210 and LYR-220 have the potential to significantly improve symptoms by maintaining a steady, high dose of MF at the site of inflammation for six months with a single administration. • Patient Compliance : Because drug delivery for LYR-210 and LYR-220 is designed to be sustained for six months with a single administration, the efficacy of LYR-210 and LYR-220 will not depend on patient compliance within the treatment period, unlike other CRS treatment options that require repeated daily administrations, such as topical intranasal steroids and oral steroids. • Patient Experience : LYR-210 and LYR-220 are designed to be administered via a simple, in-office procedure every six months, which is intended to enhance convenience for patients, unlike the repeated daily medical management and/or time-consuming and painful surgery required by certain other CRS treatment options.
The mesh scaffold is comprised of bioresorbable polymers and is pliable to maximize patient comfort. • Engineered Elastomeric Matrix — our engineered elastomeric matrix, which means a polymeric matrix composed of polymers having elastic characteristics, has advanced physical properties resulting in implants with “shape memory” that dynamically adapt to nasal anatomy and ensure persistent positioning in the target location.
The mesh scaffold is comprised of bioabsorbable polymers and is pliable to maximize patient comfort. • Engineered Elastomeric Matrix — our engineered elastomeric matrix, which means a polymeric matrix composed of polymers having elastic characteristics, has advanced physical properties resulting in implants with “shape memory” that dynamically adapt to nasal anatomy and ensure persistent positioning in the target location.
Pharmaceutical products may face competition from lower-priced products in foreign countries that have placed price controls on pharmaceutical products and may also compete with imported foreign products.
Pharmaceutical products may face competition from lower-priced products in 24 foreign countries that have placed price controls on pharmaceutical products and may also compete with imported foreign products.
We believe LYR-210 has the potential to be a safe, effective, and broadly applicable CRS treatment, designed to enhance patient comfort and physician experience and eliminate patient compliance issues associated with other CRS treatments, such as intranasal steroid sprays, while achieving reduced costs compared to other CRS treatments, such as sinus surgery. Figure 3.
We believe LYR-210 has the potential to be a safe, effective, and broadly applicable CRS treatment, designed to enhance patient comfort and physician experience and eliminate patient compliance issues associated with other CRS treatments, such as intranasal steroid sprays, while achieving reduced costs compared to other CRS treatments, such as sinus surgery. Figure 2.
As a result of the decrease in the number of patients enrolled from planned (99 evaluable) to actually enrolled (67), a greater magnitude of change from baseline in 4CSS at week 4 and/or a smaller standard deviation associated with the change from baseline at week 4 was required in order to achieve statistical significance for the primary endpoint. Figure 5.
As a result of the decrease in the number of patients enrolled from planned (99 evaluable) to actually enrolled (67), a greater magnitude of change from baseline in 4CSS at week 4 and/or a smaller standard deviation associated with the change from baseline at week 4 was required in order to achieve statistical significance for the primary endpoint. 7 Figure 4.
The study was designed to enroll 99 evaluable patients with the option to expand to up to 150 patients at up to 30 sites in the United States, Australia, Austria, Czech Republic, New Zealand, and Poland. Due to COVID-19, we discontinued enrollment at 67 patients and did not open any sites in the United States. Figure 4.
The study was designed to enroll 99 evaluable patients with the option to expand to up to 150 patients at up to 30 sites in the United States, Australia, Austria, Czech Republic, New Zealand, and Poland. Due to COVID-19, we discontinued enrollment at 67 patients and did not open any sites in the United States. Figure 3.
Enrollment discontinued at 67 patients due to COVID-19 • Up to 50 study sites globally • Primary endpoint: Change from baseline in composite score of 7-day average of 4 cardinal symptoms (4CSS) at week 4 • Secondary objectives: Symptom improvement at week 24, sinus imaging to assess reduction in inflammation, SNOT-22, time to treatment failure, reduction in inflammation, frequency of exacerbations, pharmacokinetics/pharmacodynamics • At the 7,500 µg dose, LYR-210 achieved statistically significant improvement in 4CSS in favor of the treatment arm as measured by the change from baseline at week 16 (-1.47) (p=0.021), week 20 (-1.61) (p=0.012) and week 24 (-1.64) (p=0.016). • At the 7,500 µg dose, LYR-210 achieved statistically significant improvement in SNOT-22 score in favor of the treatment arm as measured by the change from baseline at week 8 (-12.2) (p=0.039), week 16 (-15.0) (p=0.008), week 20 (-18.4) (p=0.001) and week 24 (-19.0) (p=0.001). • Although a strong treatment effect was observed at week 4, LYR-210 did not achieve the primary endpoint of change from baseline in 4CSS at week 4 at either the 7,500 µg dose (-0.36) (p=0.306) or 2,500 µg dose (0.04) 5 Trial Status Trial Design Trial Objectives Trial Results (p=0.525).
Enrollment discontinued at 67 patients due to COVID-19 • Up to 50 study sites globally • Primary endpoint: Change from baseline in composite score of 7-day average of 4 cardinal symptoms (4CSS) at week 4 • Secondary objectives: Symptom improvement at week 24, sinus imaging to assess reduction in inflammation, SNOT-22, time to treatment failure, reduction in inflammation, frequency of exacerbations, pharmacokinetics/pharmacodynamics • At the 7,500 µg dose, LYR-210 achieved statistically significant improvement in 4CSS in favor of the treatment arm as measured by the change from baseline at week 16 (-1.47) (p=0.021), week 20 (-1.61) (p=0.012) and week 24 (-1.64) (p=0.016). • At the 7,500 µg dose, LYR-210 achieved statistically significant improvement in SNOT-22 score in favor of the treatment arm as measured by the change from baseline at week 8 (-12.2) (p=0.039), week 16 (-15.0) (p=0.008), week 20 (-18.4) (p=0.001) and week 24 (-19.0) (p=0.001). • Although a strong treatment effect was observed at week 4, LYR-210 did not achieve the primary endpoint of change from baseline in 4CSS at week 4 at either the 7,500 µg dose (-0.36) (p=0.306) or 2,500 µg dose (0.04) (p=0.525).
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 24
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 26
LYR-210 can be removed at six months or earlier at the physician’s discretion using standard instruments and, if needed, replaced with a new LYR-210. LYR-210 is made with bioresorbable polymers that, if left in place, would gradually dissolve over time.
LYR-210 can be removed at six months or earlier at the physician’s discretion using standard instruments and, if needed, replaced with a new LYR-210. LYR-210 is made with bioabsorbable polymers that, if left in place, would gradually dissolve over time.
This proprietary technology is designed to enable sustained delivery of medications for many months of therapy, targeting tissues deep in the ENT passages and potentially other diseased tissues that are not accessible with conventional therapeutic approaches.
This proprietary technology is designed to enable sustained delivery of medications for six months of therapy, targeting tissues deep in the ENT passages and potentially other diseased tissues that are not accessible with conventional therapeutic approaches.
LYR-210 is intended to be administered bilaterally into the non-operated middle meatus by an ENT physician under endoscopic visualization via a provided, single use applicator. It is designed for office-based administration performed with topical anesthesia. Once administered, LYR-210 is designed to gradually release MF to the inflamed mucosal tissue for up to six months from a single administration.
LYR-210 is intended to be administered bilaterally into the middle meatus by an ENT physician under endoscopic visualization via a provided, single use applicator. It is designed for office-based administration performed with topical anesthesia. Once administered, LYR-210 is designed to gradually release MF to the inflamed mucosal tissue for six months from a single administration.
Overview of Our Clinical Development for LYR-210 The table below summarizes our completed and ongoing clinical trials for LYR-210 for CRS in patients who have failed medical management and have not undergone endoscopic sinus surgery.
Overview of Our Clinical Development for LYR-210 The table below summarizes our completed and ongoing clinical trials for LYR-210 for CRS in patients who have failed medical management and have not undergone ethmoid sinus surgery.
Illustration of Placement of LYR-210 in Middle Meatus. 4 LYR-210 is an investigational local drug delivery system designed to fit within, and conform to, the confined space of a surgically naïve patient’s middle meatus, an air-containing space that plays a fundamental role in drainage of the paranasal sinuses (see Figure 3, above).
Illustration of Placement of LYR-210 LYR-210 is an investigational local drug delivery system designed to fit within, and conform to, the confined space of a surgically naïve patient’s middle meatus, an air-containing space that plays a fundamental role in drainage of the paranasal sinuses (see Figure 2, above).
MF blood plasma levels observed during the PK study support LYR-210’s ability to deliver consistent and steady dosing over the entire treatment period. The PK study was selected as the top clinical abstract at the 67th ARS held in October 2021. 9 Figure 7. Plasma MF Concentration for Pharmacokinetic Characterization Study.
MF blood plasma levels observed during the PK study support LYR-210’s ability to deliver consistent and steady dosing over the entire treatment period. The PK study was selected as the top clinical abstract at the 67th ARS held in October 2021. Figure 6. Plasma MF Concentration for Pharmacokinetic Characterization Study.
The trial consists of two stages – a 2- to 4-week screening and run-in stage and a 24-week treatment stage. Patients are randomized 2:1 to receive LYR-210 (7,500 µg) or sham-procedure. ENLIGHTEN II was initiated in September 2022.
The trial consists of two stages – a 2- to 4-week screening and run-in stage and a 24-week treatment stage. Patients are randomized 2:1 to receive LYR-210 (7,500 µg) or sham-procedure. ENLIGHTEN II was initiated in September 2022, and enrollment is ongoing.
Our technology platform, developed over the past decade, was first patented in 2009 by members of our team who have extensive experience in drug formulation and delivery, materials science, and biotechnology. This expertise has allowed us to significantly improve upon polymer drug delivery technology and add shape-memory properties to bioresorbable polymeric implants, one of our key innovations. 11 Figure 1.
Our technology platform, developed over the past decade, was first patented in 2009 by members of our team who have extensive experience in drug formulation and delivery, materials science, and biotechnology. This expertise has allowed us to significantly improve upon polymer drug delivery technology and add shape-memory properties to bioabsorbable polymeric implants, one of our key innovations. 13 Figure 11.
The components of our technology include: • Biocompatible Mesh Scaffold —our biocompatible mesh scaffold is designed to maximize surface area for drug release while maintaining underlying tissue function.
The components of our technology include: • Bioabsorbable Mesh Scaffold —our bioabsorbable mesh scaffold is designed to maximize surface area for drug release while maintaining underlying tissue function.
LYR-210 is positioned for use in surgically naïve CRS patients where the primary competitive treatment is surgical procedures, including endoscopic sinus surgery with and without balloon sinus dilation (BSD) and BSD as a standalone procedure.
LYR-210 is positioned for use primarily in surgically naïve CRS patients where the primary competitive treatment is surgical procedures, including ethmoid sinus surgery with and without balloon sinus dilation (BSD) and BSD as a standalone procedure.
The ENLIGHTEN I trial was initiated in February 2022. ENLIGHTEN II is a 24-week, multi-center, randomized, blinded, sham-controlled trial designed to evaluate the efficacy and safety of LYR-210 in approximately 180 surgically naïve CRS patients who have failed prior medical management.
The ENLIGHTEN I trial was initiated in February 2022, and enrollment was completed in September 2023. ENLIGHTEN II is a 24-week, multi-center, randomized, blinded, sham-controlled trial designed to evaluate the efficacy and safety of LYR-210 in approximately 180 surgically naïve CRS patients who have failed prior medical management.
We plan to supplement our direct physician outreach with appropriate medical education and marketing efforts to further penetrate our physician base and drive adoption of our products.
We plan to supplement our direct physician outreach with appropriate medical education and marketing efforts to further penetrate our physician base and encourage adoption of our products.
Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Employees As of December 31, 2022, we had 58 full-time employees. None of our employees is represented by a labor union or covered by a collective bargaining agreement.
Furthermore, there has been increased interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. Employees As of December 31, 2023, we had 88 full-time employees. None of our employees is represented by a labor union or covered by a collective bargaining agreement.
LYR-210 consists of MF, the active ingredient in various FDA-approved drugs, embedded in biocompatible polymers to aid in the controlled and sustained delivery of MF to the sinonasal mucosal tissue from a single drug administration.
LYR-210 consists of MF, the active ingredient in various FDA-approved drugs, embedded in bioabsorbable polymers to aid in the controlled and sustained delivery of MF to the sinonasal mucosal tissue 4 from a single drug administration.
We believe LYR-220 is meaningfully differentiated from currently approved products because, if successfully developed and approved, it would be the only product able to deliver up to six months of topical treatment in a single administration to treat both polyp and non-polyp post-surgery CRS patients who fail medical management.
We believe LYR-220 is meaningfully differentiated from currently approved products because, if successfully developed and approved, it would be the only product able to deliver six months of topical treatment in a single administration to treat both polyp and non-polyp post-surgery CRS patients.
LYR-220 is being studied in the ongoing Phase 2 BEACON clinical trial. • Build a commercialization infrastructure in the U.S. market for LYR-210 and LYR-220. If either of our product candidates are approved, we plan to launch an efficient, go-to-market commercialization model focused on targeted outreach to our key physician, payor, and patient audiences.
LYR-220 was studied in the recently completed Phase 2 BEACON clinical trial. • Build a commercialization infrastructure in the U.S. market for LYR-210 and LYR-220. If either of our product candidates are approved, we plan to launch an efficient, go-to-market commercialization model focused on targeted outreach to our key physician, payor, and patient audiences.
The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. This section viii statement does not require notice to the patent holder or NDA owner. There might also be no relevant patent certification.
The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. This section viii statement does not require notice to the patent holder or NDA owner.
If the reference NDA holder and patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receipt of the paragraph IV certification notice, the FDA is prohibited from approving the application until the earlier of 30 months from the receipt of the paragraph IV certification expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the applicant.
There might also be no relevant patent certification. 21 If the reference NDA holder and patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receipt of the paragraph IV certification notice, the FDA is prohibited from approving the application until the earlier of 30 months from the receipt of the paragraph IV certification expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the applicant.
Lyra’s Proprietary Drug-Eluting Matrix. Our drug-eluting bioresorbable technology is comprised of three polymeric components, which are designed to work together to enable highly efficient, localized drug delivery (see Figure 1, above).
Lyra’s Proprietary Drug-Eluting Matrix. Our drug-eluting bioabsorbable technology is comprised of three polymeric components, which are designed to work together to enable highly efficient, localized drug delivery (see Figure 11, above).
The non-polyp form of CRS represents approximately 70%-to-90% of CRS patients. Currently there are no approved treatments for CRS patients without polyps. Current Treatments and Their Limitations The goals of therapy for CRS are to reduce mucosal swelling resulting from underlying inflammation, promote sinus drainage, and eradicate infections that may be present.
The non-polyp form of CRS represents approximately 70%-to-90% of CRS patients. Current Treatments and Their Limitations The goals of therapy for CRS are to reduce mucosal swelling resulting from underlying inflammation, promote sinus drainage, and eradicate infections that may be present.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. LYR-210 and LYR-220 are positioned following the failure of medical management and therefore are not anticipated to compete directly with branded, generic, or over-the-counter inhaled corticosteroids.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. LYR-210 and LYR-220 are positioned for CRS patients without nasal polyps or small polyps following the failure of medical management and therefore are not anticipated to compete directly with branded, generic, or over-the-counter inhaled corticosteroids.
The FDA may not grant approval on a timely basis, or at all. After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter.
After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter.
A three-month steroid-eluting sinus implant was approved by the FDA to treat CRS in adults with nasal polyps and three subcutaneously-administered monoclonal antibodies (mAbs) were recently approved as add-on maintenance therapy for uncontrolled disease in adults with nasal polyps.
A nasal spray was recently approved by the FDA to treat CRS in adults without nasal polyps, a three-month steroid-eluting sinus implant was approved to treat CRS in adults with nasal polyps and three subcutaneously-administered monoclonal antibodies (mAbs) were recently approved as add-on maintenance therapy for uncontrolled disease in post-surgical adult patients with recurrent nasal polyps.
Similar state and local laws and regulations may also restrict business practices in the pharmaceutical industry, such as state anti-kickback and false claims laws, which may apply to business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or by patients themselves; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information or which require tracking gifts and other remuneration and items of value provided to physicians, other healthcare providers, and entities; state and local laws that require the registration of pharmaceutical sales representatives; and state and local laws governing the privacy and security of health-related and other personal information in some circumstances, many of which differ from each other in significant ways and often are not preempted by the Health Insurance Portability and Accountability Act, or HIPAA, thus complicating compliance efforts.
Similar state and local laws and regulations may also restrict business practices in the pharmaceutical industry, such as state anti-kickback and false claims laws, which may apply to business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or by patients themselves; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information or which require tracking gifts and other remuneration and items of value provided to physicians, other healthcare providers, and entities; state and local laws that require the registration of pharmaceutical sales representatives; and state and local laws governing the privacy and security of health-related and other personal information.
Our principal executive offices are located at 480 Arsenal Way, Watertown, MA 02472 and our telephone number is (617) 393-4600. Our website address is www.lyratx.com . The information contained in, or accessible through, our website does not constitute a part of this Annual Report on Form 10-K.
In July 2018, we changed our name to Lyra Therapeutics, Inc. Our principal executive offices are located at 480 Arsenal Way, Watertown, MA 02472 and our telephone number is (617) 393-4600. Our website address is 25 www.lyratx.com . The information contained in, or accessible through, our website does not constitute a part of this Annual Report on Form 10-K.
LYR-220 for the Treatment of CRS We are developing our second pipeline product candidate, LYR-220, for use in CRS patients who continue to require treatment to manage CRS symptoms despite having had sinus surgery.
LYR-220 for the Treatment of CRS We are developing our second pipeline product candidate, LYR-220, for use in CRS patients who have failed previous medical management and continue to require treatment to manage CRS symptoms despite having had ethmoid sinus surgery.
Although the FDA generally requests that marketing applications be supported by some data from domestic clinical studies, the FDA may accept foreign data as the sole basis for marketing approval if (1) the foreign data are applicable to the U.S. population and U.S. medical practice, (2) the studies were performed by clinical investigators with recognized competence, and (3) the data may be considered valid without the need for an on-site inspection or, if the FDA considers the inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
Although the FDA generally requests that marketing applications be supported by some data from domestic clinical studies, the FDA may accept foreign data as the sole basis for marketing approval if (1) the foreign data are applicable to the U.S. population and U.S. medical practice, (2) the studies were performed by clinical investigators with recognized competence, and (3) the data may be considered valid without the need for an on-site inspection or, if the FDA considers the inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. 20 The testing and approval process for an NDA requires substantial time, effort, and financial resources, and each may take several years to complete.
LYR-210 is designed to be administered in a brief, non-invasive, in-office procedure by an ENT physician under endoscopic visualization via a single-use applicator. We are developing our second pipeline product candidate, LYR-220, for use in CRS patients who continue to require treatment to manage CRS symptoms despite having had sinus surgery.
LYR-210 is designed to be administered in a simple, in-office procedure by an ENT physician under endoscopic visualization via a single-use applicator. We are developing our second pipeline product candidate, LYR-220, for use in CRS patients who have failed previous medical management and continue to require treatment to manage CRS symptoms despite having had ethmoid sinus surgery.
It is the only product candidate that we are aware of that is designed to provide up to six months of local delivery of anti-inflammatory medication with a single administration. The brief, non-invasive, in-office procedure allows for its implantation without the need for surgery.
It is the only product candidate that we are aware of that is designed to provide six months of continuous local delivery of anti-inflammatory medication with a single administration. The simple, in-office procedure allows for its implantation without the need for general anesthesia or surgery.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. We may explore some of these opportunities for our product candidates as appropriate.
CRS is an inflammatory disease of the paranasal sinuses which leads to debilitating symptoms and significant morbidities and affects approximately 14 million people in the United States. LYR-210 LYR-210 is designed to treat CRS patients both with and without nasal polyps who have failed previous medical management and have not undergone endoscopic sinus surgery.
CRS is an inflammatory disease of the paranasal sinuses which leads to debilitating symptoms and significant morbidities and affects approximately 14 million people in the United States. LYR-210 LYR-210 is designed to treat CRS patients who have failed previous medical management.
As of December 31, 2022, our product candidate portfolio is protected by issued and pending patents in the U.S. and major foreign countries with claims directed to devices, systems, and method of use, which, exclusive of possible patent term adjustments or extensions or other forms of exclusivity through 2036.
As of December 31, 2023, our product candidate portfolio is protected by issued patents and pending applications in the U.S. and major foreign countries with claims directed to devices, systems, and method of use, which, exclusive of possible patent term adjustments or extensions or other forms of exclusivity, provide coverage through at least 2030, with many providing coverage through 2036 and some providing coverage through 2038.
In November 2021, we initiated the Phase 2 BEACON clinical trial for LYR-220 which is a controlled, randomized, parallel-group study to evaluate safety, tolerability, pharmacokinetics, and efficacy comparing two designs of LYR-220 to control over a 24-week period in approximately 40 symptomatic adult CRS subjects who have had a prior bilateral sinus surgery.
Phase 2 In November 2021, we initiated the Phase 2 BEACON clinical trial for LYR-220 which was a sham-controlled, blinded, randomized, parallel-group study to evaluate safety, tolerability, pharmacokinetics, and efficacy of the LYR-220 (7500ug MF) matrix over a 24-week period, in 40 symptomatic adult CRS subjects who have had a prior bilateral ethmoid sinus surgery.
We have developed a larger version of LYR-210 designed for use in the enlarged nasal cavity of CRS patients who have had sinus surgery. We believe LYR-220, if successfully developed and approved, is well positioned to provide a preferred alternative to revision surgery and post-surgical medical management.
We have developed a larger version of LYR-210 designed for use in the enlarged nasal cavity of CRS patients who have had ethmoid sinus surgery. We believe LYR-220, if successfully developed and approved, is well positioned to provide a preferred treatment option for patients who have failed previous medical management and had ethmoid sinus surgery and still require medical management.
Employee turnover has not had a material impact on our operations. We consider our relationship with our employees to be good. Corporate Information We were incorporated under the laws of the state of Delaware in November 2005 under the name WMR Biomedical, Inc. In July 2018, we changed our name to Lyra Therapeutics, Inc.
Employee turnover has not had a material impact on our operations. We consider our relationship with our employees to be good. Additionally, of December 31, 2023, we had 57 consultants. Corporate Information We were incorporated under the laws of the state of Delaware in November 2005 under the name WMR Biomedical, Inc.
We may explore some of these opportunities for our product candidates as appropriate. 20 Post Approval Requirements Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA and other government authorities, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product.
Post Approval Requirements Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA and other government authorities, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product.
In our readout of top-line results, we reported that, at the 7,500 µg dose, LYR-210 achieved statistically significant improvement in 4CSS in favor of the treatment arm as measured by the change from baseline at week 16 (-1.47) (p=0.021), week 20 (-1.61) (p=0.012), and week 24 (-1.64) (p=0.016) (see Figure 5, below).
In December 2020, we reported positive topline results from our Phase 2 LANTERN clinical trial. At the 7,500 µg dose, LYR-210 achieved statistically significant improvement in 4CSS in favor of the treatment arm as measured by the change from baseline at week 16 (-1.47) (p=0.021), week 20 (-1.61) (p=0.012), and week 24 (-1.64) (p=0.016) (see Figure 4, below).
The four domains are: (1) nasal obstruction and congestion; (2) facial pain and pressure; (3) nasal discharge; and (4) olfactory loss (loss of sense of smell). 7 The key secondary endpoints for the trial were the change from baseline in 7-day average 4CSS at week 24, time to treatment failure, and percentage of subjects with at least 1-point decrease in the bilateral Zinreich score (a measure of inflammation) in at least one pair of the anterior ethmoid, maxillary, posterior ethmoid, frontal, or sphenoid sinuses at Week 24.
The key secondary endpoints for the trial were the change from baseline in 7-day average 4CSS at week 24, time to treatment failure, and percentage of subjects with at least 1-point decrease in the bilateral Zinreich score (a measure of inflammation) in at least one pair of the anterior ethmoid, maxillary, posterior ethmoid, frontal, or sphenoid sinuses at Week 24.
LYR-220 is also 10 designed to utilize MF, and employs a larger matrix designed for patients whose nasal cavity is enlarged due to sinus surgery. We estimate that 40% of patients that present to an ENT physician with CRS have had a prior surgery. These patients represent the addressable market for LYR-220.
LYR-220 is also designed to utilize MF, and employs a larger matrix designed for patients whose nasal cavity is enlarged, including those patients whose nasal cavity is larger after having undergone ethmoid sinus surgery. We estimate that 40% of patients that present to an ENT physician with CRS have had a prior surgery.
We generally acquire our single source components pursuant to purchase orders placed in the ordinary course of business. We currently maintain sufficient supplies of the API and components from our single source suppliers to support our ongoing development activities.
We generally acquire our single source components pursuant to purchase orders placed in the ordinary course of business. We currently maintain sufficient supplies of the API and components from our single source suppliers to support our ongoing development activities. 16 We are currently improving our manufacturing capabilities and increasing capacity to support larger scale clinical studies and commercialization.
Our Clinical Pipeline The current status of our clinical product candidates is summarized below. 3 LYR-210 for the Treatment of CRS We believe LYR-210, if successfully developed and approved, has the potential to become a preferred alternative to surgery for the treatment of CRS.
Status of Clinical Product Candidates LYR-210 for the Treatment of CRS We believe LYR-210, if successfully developed and approved, has the potential to become a preferred therapy for the treatment of CRS.
The technology is comprised of three interrelated components: • a biocompatible mesh scaffold, which is designed to maximize surface area for drug release while maintaining underlying tissue function; • an engineered elastomeric matrix, a polymeric matrix composed of polymers having elastic characteristics, which has advanced physical properties resulting in implants with “shape memory” that dynamically adapt to nasal anatomy; and • a versatile polymer-drug complex, which can be customized for the treatment of various chronic diseases treatable with ENT delivery to achieve the desired drug dose and drug elution rate.
The technology is comprised of three interrelated components: • a bioabsorbable mesh scaffold, which is designed to maximize surface area for drug release while maintaining underlying tissue function; • an engineered elastomeric matrix, a polymeric matrix composed of polymers having elastic characteristics, which has advanced physical properties resulting in implants with “shape memory” that dynamically adapt to nasal anatomy; and • a versatile polymer-drug complex, which is designed to deliver six months of continuous local drug therapy with a single treatment.

… 53 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

227 edited+67 added−98 removed487 unchanged
Biggest changeThe commencement and rate of completion of pre-clinical studies or clinical trials may be delayed by, or terminated because of, many factors, including: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our pre-clinical studies or clinical trials; • failure to obtain regulatory approval to commence a trial; • failure to reach, or delays in reaching, an agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • slower than expected rates of recruitment of patients or failure to recruit a sufficient number of patients; • modification of pre-clinical studies or clinical trial protocols; • changes in regulatory requirements for pre-clinical studies or clinical trials; • the impact of unusual placebo effects; • the lack of effectiveness during pre-clinical studies or clinical trials; • the emergence of unforeseen safety issues or undesirable side effects; • failure to obtain institutional review board, or the IRB, approval at each site; • delays, suspension, or termination of clinical trials by the IRB responsible for overseeing the trial at a particular trial site; • failure of patients in completing a trial or returning for post-treatment follow-up; 33 • clinical sites deviating from trial protocol, dropping out of a trial, or failing to comply with regulatory requirements; • failure to address patient safety concerns that arise during the course of a trial; • failure to manufacture sufficient quantities of product candidate for use in clinical trials; • government, IRB, or other regulatory delays or “clinical holds” requiring suspension or termination of the trials; and • business interruptions resulting from COVID-19. • We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates or significantly increase the cost of such trials, including: • we may receive feedback from regulatory authorities that requires us to modify the design of our clinical trials; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; • we may be unable to enroll a sufficient number of patients in our clinical trials to ensure adequate statistical power to detect any statistically significant treatment effects; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators, IRBs, or independent ethics committees, or IECs, may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site or may require that we or our investigators suspend or terminate clinical trials of our product candidates for various reasons, including non-compliance with regulatory requirements, a finding that our product candidates have undesirable side effects or other unexpected characteristics, or a finding that the participants are being exposed to unacceptable health risks; • we may experience delays in reaching or fail to reach agreement on acceptable pre-clinical study or clinical trial contracts or pre-clinical study or clinical trial protocols with prospective trial sites; • the cost of pre-clinical studies or clinical trials of our product candidates may be greater than we anticipate and we may not have funds to cover the costs; • the supply or quality of our product candidates or other materials necessary to conduct pre-clinical studies or clinical trials of our product candidates, or commercialize our products, may be insufficient or inadequate; • regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; and • any current or future collaborators that conduct pre-clinical studies or clinical trials may face any of the above issues, and may conduct pre-clinical studies or clinical trials in ways they view as advantageous to them but that are suboptimal for us. 34 If we are required to extend the duration of current pre-clinical studies or clinical trials or to conduct additional pre-clinical studies or clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete pre-clinical studies or clinical trials of our product candidates or other testing, if the results of these trials, studies, or tests are not positive or are only modestly positive, if there are safety concerns, or if we determine that the observed safety or efficacy profile would not be competitive in the marketplace, we may: • incur unplanned costs; • be delayed in obtaining marketing approval for our product candidates or not obtain marketing approval at all; • obtain marketing approval in some countries and not in others; • obtain marketing approval for indications or patient populations that are not as broad as intended or desired; • obtain marketing approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings; • be subject to additional post-marketing testing requirements; or • have the product removed from the market after obtaining marketing approval.
Biggest changeThe commencement and rate of completion of pre-clinical studies or clinical trials may be delayed by, or terminated because of, many factors, including: • the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our pre-clinical studies or clinical trials; • failure to obtain regulatory approval to commence a trial; • failure to reach, or delays in reaching, an agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • slower than expected rates of recruitment of patients or failure to recruit a sufficient number of patients; • modification of pre-clinical studies or clinical trial protocols; • changes in regulatory requirements for pre-clinical studies or clinical trials; • the impact of unusual placebo effects; 34 • the lack of effectiveness during pre-clinical studies or clinical trials; • the emergence of unforeseen safety issues or undesirable side effects; • failure to obtain institutional review board, or the IRB, approval at each site; • delays, suspension, or termination of clinical trials by the IRB responsible for overseeing the trial at a particular trial site; • failure of patients in completing a trial or returning for post-treatment follow-up; • clinical sites deviating from trial protocol, dropping out of a trial, or failing to comply with regulatory requirements; • failure to address patient safety concerns that arise during the course of a trial; • failure to manufacture sufficient quantities of product candidate for use in clinical trials; • government, IRB, or other regulatory delays or “clinical holds” requiring suspension or termination of the trials; and • business interruptions resulting from pandemics. • We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates or significantly increase the cost of such trials, including: ▪ we may receive feedback from regulatory authorities that requires us to modify the design of our clinical trials; ▪ clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon development programs; ▪ the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; ▪ we may be unable to enroll a sufficient number of patients in our clinical trials to ensure adequate statistical power to detect any statistically significant treatment effects; ▪ our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; ▪ regulators, IRBs, or independent ethics committees, or IECs, may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site or may require that we or our investigators suspend or terminate clinical trials of our product candidates for various reasons, including non-compliance with regulatory requirements, a finding that our product candidates have undesirable side effects or other unexpected characteristics, or a finding that the participants are being exposed to unacceptable health risks; ▪ we may experience delays in reaching or fail to reach agreement on acceptable pre-clinical study or clinical trial contracts or pre-clinical study or clinical trial protocols with prospective trial sites; ▪ the cost of pre-clinical studies or clinical trials of our product candidates may be greater than we anticipate and we may not have funds to cover the costs; ▪ the supply or quality of our product candidates or other materials necessary to conduct pre-clinical studies or clinical trials of our product candidates, or commercialize our products, may be insufficient or inadequate; 35 ▪ regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; ▪ any current or future collaborators that conduct pre-clinical studies or clinical trials may face any of the above issues, and may conduct pre-clinical studies or clinical trials in ways they view as advantageous to them but that are suboptimal for us; and ▪ any current or future collaborators that conduct pre-clinical studies or clinical trials may face any of the above issues, and may conduct pre-clinical studies or clinical trials in ways they view as advantageous to them but that are suboptimal for us.
In addition, we have not commercialized any products and have never generated any revenue from product sales. We have devoted almost all of our financial resources to research and development, including our pre-clinical development activities.
In addition, we have not commercialized any products and have never generated any revenue from product sales. We have devoted almost all of our financial resources to research and development, including our pre-clinical and clinical development activities.
Each of our product candidates will require additional pre-clinical and/or clinical development, potential regulatory approval in multiple jurisdictions, the securing of manufacturing supply, capacity, and expertise, the use of external vendors, the building of a manufacturing and commercial organization, substantial investment, and significant marketing efforts before we generate any revenue from product sales.
Each of our product candidates will require additional pre-clinical and/or clinical development, potential regulatory approval in multiple jurisdictions, the development of or securing of manufacturing supply, capacity, and expertise, the use of external vendors, the building of a manufacturing and commercial organization, substantial investment, and significant marketing efforts before we generate any revenue from product sales.
Our product candidates will require significant additional development, clinical trials, regulatory authorizations, and additional investment by us before they can be commercialized. Our business is highly dependent on the success of our most advanced product candidate, LYR-210, which will require significant additional clinical testing before we can seek regulatory approval and potentially launch our product.
Our product candidates will require significant additional development, clinical trials, regulatory authorizations, and additional investment by us before they can be commercialized. Our business is highly dependent on the success of our most advanced product candidate, LYR-210, which will require additional clinical testing before we can seek regulatory approval and potentially launch our product.
We may not be able to establish additional sources of supply for our product candidates, or may be unable to do so on acceptable terms. Manufacturing suppliers are subject to cGMP quality and regulatory requirements covering manufacturing, testing, quality control, and record keeping relating to our product candidates and are subject to ongoing inspections by the regulatory agencies.
We may not be able to establish additional sources of supply for our product candidates, or may be unable to do so on acceptable terms. Suppliers are subject to cGMP quality and regulatory requirements covering manufacturing, testing, quality control, and record keeping relating to our product candidates and are subject to ongoing inspections by the regulatory agencies.
The stock market in general and the market for smaller biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the purchase price.
The stock market in general and the market for smaller biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above your purchase price.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: • the scope and results of our pre-clinical studies and clinical trials, including any unforeseen costs we may incur as a result of pre-clinical study or clinical trial delays due to COVID-19 or other causes; • the timing of, and the costs involved in, obtaining regulatory approvals for LYR-210 and LYR-220; • the costs and timing of changes in the regulatory environment and enforcement rules; • the costs and timing in changes in pharmaceutical pricing and reimbursement infrastructure; • the costs involved in preparing, filing, prosecuting, maintaining, and enforcing patent claims and other patent-related costs, including any litigation costs and the results of such litigation; • the effect of competing technological and market developments; • the extent to which we in-license or acquire other products and technologies; • the cost of establishing sales, marketing, manufacturing, and distribution capabilities for our product candidates in regions where we choose to commercialize our products; and • the initiation, progress, timing, and results of our commercialization of LYR-210 and LYR-220, if approved for commercial sale.
Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to: • the scope and results of our pre-clinical studies and clinical trials, including any unforeseen costs we may incur as a result of pre-clinical study or clinical trial delays due to COVID-19 or other causes; • the scope and results of our pre-clinical studies and clinical trials, including any unforeseen costs we may incur as a result of pre-clinical study or clinical trial delays; • the timing of, and the costs involved in, obtaining regulatory approvals for LYR-210 and LYR-220; • the costs and timing of changes in the regulatory environment and enforcement rules; • the costs and timing in changes in pharmaceutical pricing and reimbursement infrastructure; • the costs involved in preparing, filing, prosecuting, maintaining, and enforcing patent claims and other patent-related costs, including any litigation costs and the results of such litigation; • the effect of competing technological and market developments; 29 • the extent to which we in-license or acquire other products and technologies; • the cost of establishing sales, marketing, manufacturing, and distribution capabilities for our product candidates in regions where we choose to commercialize our products; and • the initiation, progress, timing, and results of our commercialization of LYR-210 and LYR-220, if approved for commercial sale.
Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology industries include the following: 45 • an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents (other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain government healthcare programs; • a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; • new requirements to report certain financial arrangements with physicians and teaching hospitals, including reporting “transfers of value” made or distributed to prescribers and other healthcare providers and reporting investment interests held by physicians and their immediate family members; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; • extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and • establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
Among the provisions of the ACA, those of greatest importance to the pharmaceutical and biotechnology industries include the following: • an annual, non-deductible fee payable by any entity that manufactures or imports certain branded prescription drugs and biologic agents (other than those designated as orphan drugs), which is apportioned among these entities according to their market share in certain government healthcare programs; • a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; • new requirements to report certain financial arrangements with physicians and teaching hospitals, including reporting “transfers of value” made or distributed to prescribers and other healthcare providers and reporting investment interests held by physicians and their immediate family members; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; • extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability; 47 • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and • establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
If unacceptable side effects arise in the development of our product candidates, we, the FDA, the IRBs at the institutions in which our studies are conducted, or DSMB, could materially modify, suspend, or terminate our clinical trials or the FDA or comparable foreign regulatory authorities could order us to cease pre-clinical studies or clinical trials, require us to conduct additional animal or human studies regarding the safety and efficacy of our product candidates which we have not planned or anticipated, or deny approval of our product candidates for any or all targeted indications.
If unacceptable side effects arise in the development of our product candidates, we, the FDA, the IRBs at the institutions in which our studies are conducted, could materially modify, suspend, or terminate our clinical trials or the FDA or comparable foreign regulatory authorities could order us to cease pre-clinical studies or clinical trials, require us to conduct additional animal or human studies regarding the safety and efficacy of our product candidates which we have not planned or anticipated, or deny approval of our product candidates for any or all targeted indications.
If any of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by any such product, including during any long-term follow-up observation period recommended or required for patients who receive treatment using our products, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw approvals of such product; • we may be required to recall a product or change the way such product is administered to patients; 42 • additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product; • regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; • regulatory authorities may require long-term patient registries for the product; • we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a medication guide outlining the risks of such side effects for distribution to patients; • the product could become less competitive; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
If any of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by any such product, including during any long-term follow-up observation period recommended or required for patients who receive treatment using our products, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw approvals of such product; • we may be required to recall a product or change the way such product is administered to patients; • additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product; • regulatory authorities may require additional warnings on the label, such as a “black box” warning or contraindication; • regulatory authorities may require long-term patient registries for the product; • we may be required to implement a Risk Evaluation and Mitigation Strategy, or REMS, or create a medication guide outlining the risks of such side effects for distribution to patients; • the product could become less competitive; 44 • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and harm our product candidate development efforts. We will require substantial funds to further develop, manufacture, obtain approval for, and commercialize our product candidates, including LYR-210, for which we have initiated two pivotal Phase 3 clinical trials.
In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and harm our product candidate development efforts. We will require substantial funds to further develop, manufacture, obtain approval for, and commercialize our product candidates, including LYR-210, for which we initiated two pivotal Phase 3 clinical trials.
We also made certain covenants to grant an exclusive option to LianBio for the development and commercialization of our product candidate, LYR-220, in the Territory. These provisions may inhibit our development efforts, prevent us from forming strategic collaborations to develop and potentially commercialize any other product candidates and may materially harm our business, financial condition, results of operations and prospects.
We also made certain covenants to grant an exclusive option to LianBio for the development and commercialization of LYR-220 in the Territory. These provisions may inhibit our development efforts, prevent us from forming strategic collaborations to develop and potentially commercialize any other product candidates and may materially harm our business, financial condition, results of operations and prospects.
If the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates may likely take significantly longer, cost significantly more, and entail significantly greater complications and risks than anticipated, and in either case may not be successful.
If the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates may take significantly longer, cost significantly more, and entail significantly greater complications and risks than anticipated, and in either case may not be successful.
In this regard, we will need to continue to dedicate internal resources, engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing whether such controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.
In this regard, we will need to continue to dedicate internal resources, engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as 77 appropriate, validate through testing whether such controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.
In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, 41 because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us, because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors.
Further, the status of reimbursement codes for any of our product candidates, if approved, could also affect reimbursement. J-Codes and Q-Codes are reimbursement codes maintained by the Centers for Medicare and Medicaid Services, or CMS, that are a component of the Healthcare Common Procedure Coding System and are typically used to report injectable drugs that ordinarily cannot be self-administered.
Further, the status of reimbursement codes for any of our product candidates, if approved, could also affect reimbursement. J-Codes are reimbursement codes maintained by the Centers for Medicare and Medicaid Services, or CMS, that are a component of the Healthcare Common Procedure Coding System and are typically used to report injectable drugs that ordinarily cannot be self-administered.
For example, companies have experienced an increase in phishing and social engineering attacks from third parties in connection with COVID-19. Although, to our knowledge, we have not experienced any material security breach to date, any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost, or stolen.
For example, companies have experienced an increase in phishing and social engineering attacks from third parties in connection with COVID-19. Although, to our knowledge, we have not experienced any material security breach, any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost, or stolen.
The success of our product candidates will depend upon factors such as product efficacy, safety, reliability, availability, timing, scope of regulatory approval, acceptance, and price, among other 53 things. Other important factors to our success include speed in developing product candidates, completing clinical development and laboratory testing, obtaining regulatory approvals, and manufacturing and selling commercial quantities of potential products.
The success of our product candidates will depend upon factors such as product efficacy, safety, reliability, availability, timing, scope of regulatory approval, acceptance, and price, among other things. Other important factors to our success include speed in developing product candidates, completing clinical development and laboratory testing, obtaining regulatory approvals, and manufacturing and selling commercial quantities of potential products.
Although we have formal employment agreements with our executive officers, these agreements do not prevent them from terminating their employment with us at any time. In addition, our future success and growth will depend in part on the continued service of our directors, employees, and management personnel and our ability to identify, hire, and retain additional personnel.
Although we have employment agreements with our executive officers, these agreements do not prevent them from terminating their employment with us at any time. In addition, our future success and growth will depend in part on the continued service of our directors, employees, and management personnel and our ability to identify, hire, and retain additional personnel.
Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. We may discover significant deficiencies or additional material weaknesses, which we may not successfully remediate on a timely basis or at all.
Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. We may discover significant deficiencies or material weaknesses, which we may not successfully remediate on a timely basis or at all.
Failure to successfully develop or supply the device component, delays in or failure of the studies conducted by us, our collaborators, or third-party providers, or failure of our Company, our collaborators, or third-party providers to obtain or maintain regulatory approval or clearance of the device component of LYR-210 or LYR-220, as appropriate, could result in increased development costs, delays in or failure to obtain regulatory approval, and associated delays in these product candidates reaching the market.
Failure to successfully develop or supply the device component, delays in or failure of the studies conducted by us, our collaborators, or third-party providers, or failure of our Company, our collaborators, or third-party providers to obtain or maintain regulatory approval or clearance of the device component of LYR-210 or LYR-220, as appropriate, could result 40 in increased development costs, delays in or failure to obtain regulatory approval, and associated delays in these product candidates reaching the market.
In markets outside of the United States and the EU, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In addition, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
In markets outside of the United States and the EU, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. 48 In addition, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
These laws and regulations govern, among other things, the controlled use, handling, release, and disposal of and the maintenance of a registry for, hazardous materials and biological materials, such as chemical solvents, human cells, carcinogenic compounds, mutagenic compounds, and compounds that have a toxic effect on reproduction, laboratory procedures, and exposure to blood-borne pathogens.
These laws and regulations govern, among other things, the controlled use, handling, release, and disposal of and the maintenance of a registry for, hazardous materials and biological materials, such as chemical solvents, human cells, carcinogenic compounds, mutagenic compounds, and compounds that 54 have a toxic effect on reproduction, laboratory procedures, and exposure to blood-borne pathogens.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. 80 Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our management on our internal control over financial reporting.
This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our management on our internal control over financial reporting.
Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis. We rely on third parties to conduct our pre-clinical studies and clinical trials.
Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis. 63 We rely on third parties to conduct our pre-clinical studies and clinical trials.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to 68 invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Although we believe a single marketing application for the approval of a combination product would be successful, there can be no assurance that the FDA will not determine that separate marketing applications are necessary. This determination could significantly increase the resources and time required to bring a particular combination product to 38 market.
Although we believe a single marketing application for the approval of a combination product would be successful, there can be no assurance that the FDA will not determine that separate marketing applications are necessary. This determination could significantly increase the resources and time required to bring a particular combination product to market.
We cannot assure you that any data that we or others generate, including from any pivotal Phase 3 clinical study we may pursue for LYR-210, will be consistent with that observed in the Phase 1 clinical trial of LYR-210 and Phase 2 LANTERN clinical trial, nor that results will be maintained beyond the time points studied.
We cannot assure you that any data 57 that we or others generate, including from any pivotal Phase 3 clinical study we may pursue for LYR-210, will be consistent with that observed in the Phase 1 clinical trial of LYR-210 and Phase 2 LANTERN clinical trial, nor that results will be maintained beyond the time points studied.
We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations, and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach.
We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations, and systems, 66 agreements or security measures may be breached, and we may not have adequate remedies for any breach.
If LYR-210 does not receive regulatory approval or is not successfully commercialized, or is significantly delayed in doing so, our business will be harmed. A substantial portion of our business and future success depends on our ability to develop, obtain regulatory approval for, and successfully commercialize our most advanced product candidate, LYR-210.
If LYR-210 does not 30 receive regulatory approval or is not successfully commercialized, or is significantly delayed in doing so, our business will be harmed. A substantial portion of our business and future success depends on our ability to develop, obtain regulatory approval for, and successfully commercialize our most advanced product candidate, LYR-210.
If a significant portion of these development efforts are not successfully completed, required regulatory approvals are not obtained, or any approved products are not commercially successful, our business, financial condition, and results of operations may be materially harmed. 36 Success in pre-clinical or earlier clinical trials may not be indicative of results in future clinical trials.
If a significant portion of these development efforts are not successfully completed, required regulatory approvals are not obtained, or any approved products are not commercially successful, our business, financial condition, and results of operations may be materially harmed . Success in pre-clinical or earlier clinical trials may not be indicative of results in future clinical trials.
As a result, it may be more difficult for us to attract and 43 retain qualified people to serve on our board of directors, our board committees, or as executive officers. We do not know, however, if we will be able to maintain existing insurance with adequate levels of coverage.
As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees, or as executive officers. We do not know, however, if we will be able to maintain existing insurance with adequate levels of coverage.
Most of our competitors, including many of those listed above, have substantially greater capital resources, robust product candidate pipelines, established presence in the market, and expertise in research and development, manufacturing, pre-clinical and clinical testing, obtaining regulatory approvals and reimbursement, and marketing approved products than we do.
Most of our competitors, including many of those listed above, have substantially greater capital resources, robust product candidate pipelines, established presence in the market, and expertise in research and development, 55 manufacturing, pre-clinical and clinical testing, obtaining regulatory approvals and reimbursement, and marketing approved products than we do.
If our products fail to capture and maintain market share, we may not achieve sufficient product revenues and our business will suffer. We will compete against fully integrated pharmaceutical companies and smaller companies that are collaborating with larger pharmaceutical companies, academic institutions, government agencies, and other public and private research organizations.
If our products fail to capture and maintain market share, we may not achieve sufficient product revenues and our business will suffer. We will compete against fully integrated pharmaceutical companies and smaller companies that are collaborating with larger pharmaceutical companies, academic institutions, government agencies, and other public and private research 61 organizations.
If we lose key management or scientific personnel, cannot recruit qualified employees, directors, officers, or other significant personnel, or experience increases in our compensation costs, our business may materially suffer. We are highly dependent on our management and directors, including our chief executive officer, Maria Palasis, Ph.D., among others.
If we lose key management or scientific personnel, cannot recruit or retain qualified employees, directors, officers, or other significant personnel, or experience increases in our compensation costs, our business may materially suffer. We are highly dependent on our management and directors, including our chief executive officer, Maria Palasis, Ph.D., among others.
If any of our product candidates receives marketing approval and we, or others, later discover that the drug is less effective than previously believed or causes undesirable side effects that were not previously identified, our ability, or that of any potential future collaborators, to market the drug could be compromised.
If any of our product candidates receives marketing approval and we, or others, later discover that the drug is less effective than previously believed or causes 43 undesirable side effects that were not previously identified, our ability, or that of any potential future collaborators, to market the drug could be compromised.
If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially. 59 The sizes of the patient populations that our product candidates are intended to treat have not been established with precision.
If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially. The sizes of the patient populations that our product candidates are intended to treat have not been established with precision.
If we are unable to establish name 72 recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected. Our proprietary rights may not adequately protect our technologies and product candidates, and do not necessarily address all potential threats to our competitive advantage.
If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected. Our proprietary rights may not adequately protect our technologies and product candidates, and do not necessarily address all potential threats to our competitive advantage.
In these countries, the patent owner may have limited remedies, which could materially diminish the value of the patent. If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our trademarks of interest and our business may be adversely affected.
In these countries, the patent owner may have limited remedies, which could materially diminish the value of the patent. 70 If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our trademarks of interest and our business may be adversely affected.
In the agreement with LianBio, while we have agreed that we must use commercially reasonable efforts to complete a global Phase III clinical trial for LR-210 and seek regulatory approval for the same in the United States, LianBio must also use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize LYR-210 in the Territory.
In the agreement with LianBio, while we have agreed that we must use commercially reasonable efforts to complete a global Phase III clinical trial for LR-210 and seek regulatory approval in the United States, LianBio must also use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize LYR-210 in the Territory.
We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for 46 healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
Our product candidates are intended to compete directly or indirectly with existing products and treatments. Even if approved and commercialized, our product candidates may fail to achieve market acceptance with hospitals, physicians, or patients. Hospitals, physicians, or patients may conclude that our potential products are less safe or effective or otherwise less attractive than these existing drugs.
Our product candidates are intended to compete directly or indirectly with existing products and treatments. Even if approved and commercialized, our product candidates may fail to achieve market acceptance with hospitals, physicians, or patients. Hospitals, physicians, or patients may conclude that our potential products are less safe or effective or otherwise less attractive than these existing treatments.
There are significant expenses and risks involved with establishing our own sales, marketing, and distribution capabilities, including our ability to hire, retain, and appropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team.
There are significant expenses and risks involved with establishing our own manufacturing, sales, marketing, and distribution capabilities, including our ability to hire, retain, and appropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team.
Any such delay or rejection could prevent us from commercializing our product candidates. 63 If any of our relationships with these third-parties terminate, we may not be able to enter into arrangements with alternative third parties or do so on commercially reasonable terms.
Any such delay or rejection could prevent us from commercializing our product candidates. If any of our relationships with these third-parties terminate, we may not be able to enter into arrangements with alternative third parties or do so on commercially reasonable terms.
If we are unable to continue to attract and retain high quality personnel, our ability to develop and commercialize product candidates will be limited. 74 Many of our employees have become or will soon become vested in a substantial amount of our common stock or a number of common stock options.
If we are unable to continue to attract and retain high quality personnel, our ability to develop and commercialize product candidates will be limited. Many of our employees have become or will soon become vested in a substantial amount of our common stock or a number of common stock options.
Misconduct by our employees and independent contractors, including principal investigators, CROs, consultants, vendors, and any third parties we may engage in connection with research, development, regulatory, manufacturing, quality assurance, and other pharmaceutical functions and commercialization, could include intentional, reckless, or negligent conduct or unauthorized activities that violate: (i) the laws and regulations of the FDA, the European Medicines Agency, or the EMA, and other similar regulatory authorities, including those laws that require the reporting of true, complete, and accurate information to such authorities; (ii) manufacturing standards; (iii) data privacy, security, fraud and abuse, and other healthcare laws and regulations; or (iv) laws that require the reporting of true, complete, and accurate financial information and data.
Misconduct by our employees and independent contractors, including principal investigators, CROs, consultants, vendors, and any third parties we may engage in connection with research, development, regulatory, manufacturing, quality assurance, and other pharmaceutical functions and commercialization, could include intentional, reckless, or negligent conduct or unauthorized activities that violate: (i) the laws and regulations of the FDA, the European Medicines Agency, or the EMA, and other similar regulatory authorities, including those laws that require the reporting of true, complete, and accurate information to such authorities; (ii) manufacturing standards; or (iii) data privacy, security, fraud and abuse, and other healthcare laws and regulations.
The degree of market acceptance of LYR-210 or LYR-220, if approved for commercial sale, will depend on a number of factors, including but not limited to: • perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of our technology; • the perception by members of the healthcare community, including physicians, or patients that the process of administering LYR-210 or LYR-220 is not unduly cumbersome; • the efficacy and potential advantages compared to alternative treatments; • effectiveness of sales and marketing efforts; • the cost of treatment in relation to alternative treatments; • our ability to offer our products for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; 56 • the strength of marketing and distribution support; • the timing of market introduction of competitive products; • the availability of third-party coverage and adequate reimbursement; • product labeling or product insert requirements of the FDA, the EMA, or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; • the prevalence and severity of any side effects; and • any restrictions on the use of our product together with other medications.
The degree of market acceptance of LYR-210 or LYR-220, if approved for commercial sale, will depend on a number of factors, including but not limited to: • perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of our technology; • the perception by members of the healthcare community, including physicians, or patients that the process of administering LYR-210 or LYR-220 is not unduly cumbersome; • the efficacy and potential advantages compared to alternative treatments; • effectiveness of sales and marketing efforts; • the cost of treatment in relation to alternative treatments; • our ability to offer our products for sale at competitive prices; • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support; • the timing of market introduction of competitive products; • the availability of third-party coverage and adequate reimbursement; • product labeling or product implant requirements of the FDA, the EMA, or other regulatory authorities, including any limitations or warnings contained in a product’s approved labeling; • the prevalence and severity of any side effects; and • any restrictions on the use of our product together with other medications.
Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs and biologics when an equivalent generic drug, biosimilar, or a less expensive therapy is available.
Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs and biologics when an 56 equivalent generic drug, biosimilar, or a less expensive therapy is available.
The market price for our common stock may be influenced by many factors, including: • the success of competitive products or technologies; • actual or expected changes in our growth rate relative to our competitors; • results of clinical trials of our product candidates or those of our competitors; 76 • developments related to our existing or any future collaborations; • regulatory actions with respect to our product candidates or our competitors’ products and product candidates; • regulatory or legal developments in the United States and other countries; • development of new product candidates that may address our markets and make our product candidates less attractive; • changes in physician, hospital, or healthcare provider practices that may make our product candidates less useful; • announcements by us, our partners, or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments; • developments or disputes concerning patent applications, issued patents, or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; • the results of our efforts to discover, develop, acquire, or in-license additional product candidates or products; • actual or expected changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • short selling activities; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K.
The market price for our common stock may be influenced by many factors, including: • the success of competitive products or technologies; • actual or expected changes in our growth rate relative to our competitors; • results of clinical trials of our product candidates or those of our competitors; • developments related to our existing or any future collaborations; • regulatory actions with respect to our product candidates or our competitors’ products and product candidates; 73 • regulatory or legal developments in the United States and other countries; • development of new product candidates that may address our markets and make our product candidates less attractive; • changes in physician, hospital, or healthcare provider practices that may make our product candidates less useful or appealing; • announcements by us, our partners, or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations, or capital commitments; • developments or disputes concerning patent applications, issued patents, or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; • the results of our efforts to discover, develop, acquire, or in-license additional product candidates or products; • actual or expected changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment or reimbursement systems; • market conditions in the pharmaceutical and biotechnology sectors; • short selling activities; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K.
If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized.
If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international 41 markets are delayed, our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized.
Buy and bill 54 products must be purchased by healthcare providers before they can be administered to patients. Healthcare providers subsequently must seek reimbursement for the product from the applicable third-party payor, such as Medicare or a health insurance company.
Buy and bill products must be purchased by healthcare providers before they can be administered to patients. Healthcare providers subsequently must seek reimbursement for the product from the applicable third-party payor, such as Medicare or a health insurance company.
To the extent separate coverage or reimbursement is available for any product candidate, if approved, and a specific J-Code or Q-Code is not available, physicians would need to use a non-specific miscellaneous J-Code to bill third-party payors for these physician-administered drugs.
To the extent separate coverage or reimbursement is available for any product candidate, if approved, and a specific J-Code is not available, physicians would need to use a non-specific miscellaneous J-Code to bill third-party payors for these physician-administered drugs.
If these third-party manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities.
If these third-party manufacturers cannot successfully manufacture or supply material that conforms to our specifications and the strict regulatory requirements of the FDA or others, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities.
In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved indication (or any additional indications approved during the period of extension).
In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits a patent term extension of up to five years beyond the normal expiration of the patent, which is limited to the approved indication (or any additional equivalent indications approved during the period of extension).
Our employees may be more likely to leave us if the shares they own have significantly appreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly below the market price of our common stock.
Our employees may be more likely to leave us if the shares they own have significantly appreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly above or below the market price of our common stock.
Claims that we have violated 52 individuals’ privacy rights or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
Claims that we have violated individuals’ privacy rights or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
The GDPR requires us, among other things, to make detailed disclosures to data subjects, to disclose the legal basis on which we can process personal data, to obtain valid consent for processing, to appoint data protection officers when sensitive personal data, such as health data, is processed on a large scale, and provides robust rights for data subjects, introduces mandatory data breach notification, imposes additional obligations on us when contracting with service providers, and requires us to adopt appropriate privacy governance including policies, procedures, training, and data audit.
In Europe, the GDPR requires us, among other things, to make detailed disclosures to data subjects, to disclose the legal basis on which we can process personal data, to obtain valid consent for processing, to appoint data protection officers when sensitive personal data, such as health data, is processed on a large scale, and provides robust rights for data subjects, introduces mandatory data breach notification, imposes additional obligations on us when contracting with service providers, and requires us to adopt appropriate privacy governance including policies, procedures, training, and data audit.
Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates and/or harm our reputation and financial results.
Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates and/or harm our reputation and 67 financial results.
The global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
For example, the loss of pre-clinical studies or clinical trial data from completed, ongoing, or planned trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
For example, the loss of pre-clinical studies or clinical trial data from completed, ongoing, or 45 planned trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. 69 The outcome following legal assertions of invalidity and unenforceability is unpredictable.
The failure of pre-clinical studies or clinical trials to demonstrate safety and effectiveness for the desired indications could harm the development of that product candidate and other product candidates. This failure could cause us to abandon a product candidate and could delay development of other product candidates.
The failure of pre-clinical studies or clinical trials to demonstrate 36 safety and effectiveness for the desired indications could harm the development of that product candidate and other product candidates. This failure could cause us to abandon a product candidate and could delay development of other product candidates.
Beginning in 2022, such obligations include payments and other transfers of value provided in the previous year to certain other healthcare professionals, including physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives; 50 • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws that require the registration of pharmaceutical sales representatives; and • similar healthcare laws and regulations in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.
Such obligations 51 include payments and other transfers of value provided in the previous year to certain other healthcare professionals, including physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • analogous U.S. state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and state and local laws that require the registration of pharmaceutical sales representatives; and • similar healthcare laws and regulations in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers.
We may seek additional collaborative relationships for the development and commercialization of LYR-210, LYR-220, or any future product candidates. Failure to obtain a collaborative relationship for LYR-210, LYR-220, or any future product candidates may significantly impair the potential for these product candidates.
We may seek additional collaborative relationships for the development and commercialization of LYR-210, LYR-220, or any future product candidates. Failure to obtain a collaborative relationship for LYR-210, LYR-220, or any 64 future product candidates may significantly impair the potential for these product candidates.
Failure by any of our suppliers to comply with applicable regulations may result in long delays and interruptions in supply. 65 Manufacturing suppliers are also subject to local, state, and federal regulations and licensing requirements. Failure by any of our suppliers to comply with all applicable regulations and requirements may result in long delays and interruptions in supply.
Failure by any of our suppliers to comply with applicable regulations may result in long delays and interruptions in supply. Manufacturing suppliers are also subject to local, state, and federal regulations and licensing requirements. Failure by any of our suppliers to comply with all applicable regulations and requirements may result in long delays and interruptions in supply.
For example, these persons, if they choose to act together, would control or significantly influence the election of directors, the composition of our management, and approval of any merger, consolidation, or sale of all or substantially all of our assets. 77 A significant portion of our total outstanding shares are eligible to be sold into the market in the near future, which could cause the market price of our common stock to drop significantly, even if our business is doing well.
For example, these persons, if they choose to act together, would control or significantly influence the election of directors, the composition of our management, and approval of any merger, consolidation, or sale of all or substantially all of our assets. 74 A significant portion of our total outstanding shares are eligible to be sold into the market in the near future, which could cause the market price of our common stock to drop significantly, even if our business is doing well.
Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject drug candidate, the costs and complexities of manufacturing and delivering such drug candidate to patients, the potential of competing drugs, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally.
Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject drug candidate, the costs and complexities of manufacturing and delivering such drug candidate to patients, the potential of competing therapies, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and industry and market conditions generally.
We expect that a substantial portion of our efforts and expenditures over the next few years will be devoted to LYR-210, which will require additional clinical development and potential additional pre-clinical development, management of clinical and medical affairs and manufacturing activities, regulatory approval in multiple jurisdictions, the securing of manufacturing supply, the building of a commercial organization, substantial investment, and significant marketing efforts before we can generate any revenues from any commercial sales.
We expect that a substantial portion of our efforts and expenditures over the next few years will be devoted to LYR-210 and LYR-220, which will each require additional clinical development and potential additional pre-clinical development, management of clinical and medical affairs and manufacturing activities, regulatory approval in multiple jurisdictions, the securing of manufacturing supply, the building of a manufacturing and commercial organization, substantial investment, and significant marketing efforts before we can generate any revenues from any commercial sales.
In general, the patient population for any clinical trials conducted outside of the United States must be representative of the population for which we intend to seek approval for the product in the United States.
In general, the patient population for any clinical trials conducted outside of the United States must be representative of the population for which we intend to seek approval 39 for the product in the United States.
The FDA or comparable foreign regulatory authorities may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself 40 may be jeopardized.
The FDA or comparable foreign regulatory authorities may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.
Switching or adding additional CROs, investigators, and other third parties involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.
Switching or adding additional CROs, investigators, and other third parties involve additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.
If we lose one or more of our executive officers or key employees, our ability to implement our business strategy successfully could be seriously harmed.
If we lose one or 72 more of our executive officers or key employees, our ability to implement our business strategy successfully could be seriously harmed.
We have entered into a collaboration, and may enter into collaborations, that place the development and commercialization of our product candidates outside our control, require us to relinquish important rights or may otherwise be on terms unfavorable to us, and if our collaborations are not successful, our product candidates may not reach their full market potential.
We have entered into a collaboration, and may enter into other collaborations, that place the development and commercialization of our product candidates outside our control, require us to relinquish important rights or may 32 otherwise be on terms unfavorable to us, and if our collaborations are not successful, our product candidates may not reach their full market potential.
The FDA may require changes in the labeling of 47 already approved drug products and require that sponsors conduct post-marketing studies. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control.
The FDA may require changes in the labeling of already approved drug products and require that sponsors conduct post-marketing studies. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality.
If our product candidates are approved, but do not achieve an adequate level of acceptance by physicians, healthcare payors, and patients, we may not generate sufficient revenue from these products, and we may not be able to achieve or sustain profitability.
If our product candidates are approved, but do not achieve an adequate cost of goods or level of acceptance by physicians, healthcare payors, and patients, we may not generate sufficient revenue from these products, and we may not be able to achieve or sustain profitability.
If we are unable to establish sales, marketing, and distribution capabilities either on our own or in collaboration with third parties, we may not be successful in commercializing LYR-210 or LYR-220, if approved, and we may not be able to generate any revenue.
If we are unable to successfully establish manufacturing, sales, marketing, and distribution capabilities either on our own or in collaboration with third parties, we may not be successful in commercializing LYR-210 or LYR-220, if approved, and we may not be able to generate any revenue.
Our expenses will also increase substantially if and as we: 25 • continue the two pivotal Phase 3 ENLIGHTEN clinical trials of our most advanced product candidate, LYR-210; • complete the Phase 2 BEACON clinical trial of LYR-220; • continue to discover and develop additional product candidates; • establish manufacturing and supply chain capacity sufficient to provide clinical and commercial quantities of any product candidates for which we may obtain marketing approval; • seek regulatory and marketing approvals for product candidates that successfully complete clinical trials, if any; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval in geographies in which we plan to commercialize our products ourselves; • maintain, expand, and protect our intellectual property portfolio; • hire additional staff, including clinical, scientific, technical, manufacturing, regulatory, operational, financial, commercial, and support personnel, to execute our business plan; • add clinical, scientific operational, financial, and management information systems and personnel to support our product development and potential future commercialization efforts, and as to enable us to operate as a public reporting company; • utilize external vendors for support with respect to research, development, commercialization, regulatory, pharmacovigilance, and other functions; • acquire or in-license other commercial products, product candidates, and technologies; • expand internationally; • make royalty, milestone, or other payments under any future in-license agreements; • implement additional internal systems and infrastructure; and • operate as a public company.
Our expenses will also increase substantially if and as we: • continue the two pivotal Phase 3 ENLIGHTEN clinical trials of our most advanced product candidate, LYR-210; 27 • continue the clinical development of LYR-220; • establish manufacturing and supply chain capacity sufficient to provide clinical and commercial quantities of any product candidates for which we may obtain marketing approval; • seek regulatory and marketing approvals for product candidates that successfully complete clinical trials, if any; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval in geographies in which we plan to commercialize our products ourselves; • maintain, expand, and protect our intellectual property portfolio; • hire additional staff, including clinical, scientific, technical, manufacturing, regulatory, quality, operational, financial, commercial, and support personnel, to execute our business plan; • add clinical, scientific operational, financial, and management information systems and personnel to support our product development and potential future commercialization efforts, and as to enable us to operate as a public reporting company; • utilize external vendors for support with respect to research, development, commercialization, regulatory, pharmacovigilance, and other functions; • acquire or in-license other commercial products, product candidates, and technologies; • discover and develop additional product candidates; • expand internationally; • make royalty, milestone, or other payments under any future in-license agreements; • implement additional internal manufacturing capabilities, systems and infrastructure; and • operate as a public company.
Moreover, insurance coverage is becoming increasingly expensive and in the future we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability.
Moreover, insurance coverage is becoming increasingly expensive and in the future we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses.
Furthermore, negative posts or comments about us or our product candidates in social media could seriously damage our reputation, brand image, and goodwill. Any of these events could have a material adverse effect on our business, prospects, operating results, and financial condition and could adversely affect the price of our common stock.
Furthermore, negative posts or comments about us or our product candidates in social media could seriously damage our reputation, brand image, and goodwill, regardless of the truthfulness of such posts. Any of these events could have a material adverse effect on our business, prospects, operating results, and financial condition and could adversely affect the price of our common stock.
Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete pre-clinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical development is a long, expensive, and uncertain process that is subject to significant delays.
Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we may need to complete pre-clinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical development is a long, expensive, and uncertain process that is subject to significant delays.

… 312 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed0 unchanged
Biggest changeIn May 2022, we executed a new lease for laboratory and office space. This lease will commence when we obtain possession of the underlying asset, which is expected to occur in the fourth quarter of 2023, following completion of construction to prepare the premises for our intended use.
Biggest changeIn May 2022, we executed a new lease for laboratory, manufacturing, and office space in Waltham, Massachusetts. This lease commenced on December 21, 2023 when we obtained possession of the underlying asset, following completion of construction. In December 2023, we executed a sublease for laboratory and office space in Waltham, Massachusetts.
Item 2. Pro perties. We occupy office and laboratory space in Watertown, Massachusetts under a lease agreement, as amended, that terminates on April 30, 2024. We do not own any real property. We believe that our facilities are sufficient to meet our current needs and that suitable additional space will be available as and when needed.
Item 2. Pro perties. We occupy office and laboratory space in Watertown, Massachusetts under a lease agreement, as amended, that terminates on April 30, 2027. We do not own any real property. We believe that our facilities are sufficient to meet our current needs and that suitable additional space will be available as and when needed.
Added
We obtained possession and this sublease commenced on January 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+3 added−2 removed1 unchanged
Biggest changeOn March 17, 2023, we filed a complaint in the Court of Chancery of the State of Delaware against a former contract manufacturer alleging breach of contract.
Biggest changeOn May 10, 2023, the Company filed a complaint in the Superior Court of the State of Delaware against a former contract manufacturer alleging breach of contract. The Company alleged in its complaint that the former contract manufacturer breached the Master Clinical Supply Agreement (“MCSA”).
Removed
We alleged in our complaint that our former contract manufacturer breached our Master Clinical Supply Agreement (“MCSA”) by misrepresenting their ability to produce LYR-210 in accordance with our specifications and with a robust quality system in place, and failed to return certain customer materials and equipment as required under the MCSA.
Added
The Company’s complaint sought monetary damages and the return of equipment and materials that the Company owned. On July 20, 2023, the same contract manufacturer filed an answer and amended counterclaims to the Company’s May 10, 2023 complaint (the “Litigation”).
Removed
Our complaint seeks monetary damages and the return of equipment and materials that we own. On March 28, 2023, the contract manufacturer filed a motion to remove the case from the Chancery Court to the United States District Court for the District of Delaware. Item 4. Mine Safe ty Disclosures. Not applicable. 83 PART II
Added
On November 2, 2023, the Company entered into a settlement and release agreement, related to the Litigation, pursuant to which each of the Company and the contract manufacturer provided broad mutual releases of all claims relating to or arising out of the MCSA, including without limitation, all claims brought in the Litigation or that could have been brought in the Litigation.
Added
The Company and the former contract manufacturer agreed to jointly file a Stipulation of Dismissal with prejudice relating to the Litigation. Item 4. Mine Safe ty Disclosures. Not applicable. 82 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−1 removed4 unchanged
Biggest changeHowever, because many of our outstanding shares are held in accounts with brokers and other institutions, we believe we have more beneficial owners. Dividend Policy We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future.
Biggest changeHowever, because many of our outstanding shares are held in accounts with brokers and other institutions, we believe we have more beneficial owners. Dividends We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future.
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser In the quarter ended December 31, 2022, we did not repurchase any of our equity securities or issue any securities that were not registered under the Securities Act.
Recent Sales of Unregistered Securities; Purchases of Equity Securities by the Issuer or Affiliated Purchaser In the quarter ended December 31, 2023, we did not repurchase any of our equity securities or issue any securities that were not registered under the Securities Act.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on The Nasdaq Global Market under the symbol “LYRA.” Holders As of March 1, 2023, there were approximately 70 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is listed on The Nasdaq Global Market under the symbol “LYRA.” Holders As of March 1, 2024, there were approximately 68 holders of record of our common stock.
Removed
On March 20, 2012, we declared and paid a special cash dividend of $0.2630467 per share of our common stock, par value $0.001, which we refer to as the Special Dividend, which totaled approximately $42,115 in the aggregate. Other than the Special Dividend, we have not declared or paid any cash dividends on our capital stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

63 edited+35 added−7 removed101 unchanged
Biggest changeNet cash provided by changes in our operating assets and liabilities during the year ended December 31, 2021 consisted primarily of a $11.7 million increase in deferred revenue due to payments received under our License and Collaboration agreement, and a $3.6 million increase in accounts payable and accrued expenses, partially offset by a $1.3 million increase in prepaid expenses and other current assets. 96 Net Cash Used in Investing Activities Net cash used in investing activities was $65.0 million for the year ended December 31, 2022 compared to $3.4 million for the year ended December 31, 2021.
Biggest changeNet cash used in our operating assets and liabilities during the year ended December 31, 2023 consisted primarily of a decrease of $1.6 million of deferred revenue, as well as an increase in right-of-use assets of $5.1 million, a decrease in operating lease liabilities, of $1.2 million, both of which were partially offset by an increase in accrued expenses and accounts payable of $1.9 million and a decrease in prepaid expenses and other assets of $1.1 million due to the timing of payments.
The duration, costs, and timing of preclinical studies, clinical trials, and development of our product candidates will depend on a variety of factors, including: • successful completion of clinical trials with safety, tolerability, and efficacy profiles for LYR-210, LYR-220, and any potential future product candidates that are satisfactory to the FDA or any comparable foreign regulatory authority; • approval of an IND for LYR-220 and any potential future product candidate to commence planned or future clinical trials in the United States or foreign countries; • significant and changing government regulation and regulatory guidance; • timing and receipt of marketing approvals from applicable regulatory authorities; • making arrangements with CMOs for third-party clinical and commercial manufacturing to obtain sufficient supply of our product candidates; • obtaining and maintaining patent and other intellectual property protection and regulatory exclusivity for our product candidates; • commercializing the product candidates, if and when approved, whether alone or in collaboration with others; • competition with other therapies; and • business interruptions resulting from COVID-19.
The duration, costs, and timing of preclinical studies, clinical trials, and development of our product candidates will depend on a variety of factors, including: • successful completion of clinical trials with safety, tolerability, and efficacy profiles for LYR-210, LYR-220, and any potential future product candidates that are satisfactory to the FDA or any comparable foreign regulatory authority; • approval of an IND for any potential future product candidate to commence planned or future clinical trials in the United States or foreign countries; • significant and changing government regulation and regulatory guidance; • timing and receipt of marketing approvals from applicable regulatory authorities; • making arrangements with CMOs for third-party clinical and commercial manufacturing to obtain sufficient supply of our product candidates; • obtaining and maintaining patent and other intellectual property protection and regulatory exclusivity for our product candidates; • commercializing the product candidates, if and when approved, whether alone or in collaboration with others; • competition with other therapies; and • business interruptions resulting from COVID-19.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the 90 entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (that is, the good or service is capable of being distinct) and (ii) the entity’s promise to transfer the good or service to the customer is separately 91 identifiable from other promises in the contract (that is, the promise to transfer the good or service is distinct within the context of the contract).
Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (that is, the good or service is capable of being distinct) and (ii) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (that is, the promise to transfer the good or service is distinct within the context of the contract).
Pursuant to the securities purchase agreement, (i) certain investors purchased an aggregate of 18,815,159 shares of common stock at $4.22 per share for gross proceeds to the Company of $79.4 million and (ii) certain investors purchased pre-funded warrants to purchase an aggregate of 5,000,000 shares of common stock, with the exercise price of $0.001 per share for gross proceeds of $21.1 million to the Company.
Pursuant to the securities purchase agreement, (i) certain investors purchased an aggregate of 95 18,815,159 shares of common stock at $4.22 per share for gross proceeds to the Company of $79.4 million and (ii) certain investors purchased pre-funded warrants to purchase an aggregate of 5,000,000 shares of common stock, with the exercise price of $0.001 per share for gross proceeds of $21.1 million to the Company.
We will remain an emerging growth company until the earliest to occur of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, or December 31, 2025, (b) in which we have total annual gross revenues of $1.235 billion or more, or (c) in which we are deemed to be a large accelerated filer under the rules of the SEC, which means the market value of our outstanding common stock held by non-affiliates exceeds $700 million as of last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years. 98
We will remain an emerging growth company until the earliest to occur of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, or December 31, 2025, (b) in which we have total annual gross revenues of $1.235 billion or more, or (c) in which we are deemed to be a large accelerated filer under the rules of the SEC, which means the market value of our outstanding common stock held by non-affiliates exceeds $700 million as of last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years. 99
We expense research and development costs as incurred. We recognize costs for certain development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as clinical site activations, patient enrollment, or information provided to us by our vendors and our clinical investigative sites.
We expense research and development costs as incurred. We recognize costs for certain development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as clinical site 88 activations, patient enrollment, or information provided to us by our vendors and our clinical investigative sites.
See Note 9 to the consolidated financial statements included in this Annual Report on Form 10-K for further discussion of the arrangement. As part of the accounting for this arrangement, we must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract.
See Note 10 to the consolidated financial statements included in this Annual Report on Form 10-K for further discussion of the arrangement. As part of the accounting for this arrangement, we must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract.
We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less.
We do not assess whether a contract has a significant 91 financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less.
Additionally, we determined that LianBio’s right of first refusal to obtain development and commercial rights in the licensed territories to LYR-220 is an option as any agreement would be negotiated at arm’s length and as a result does not provide a material right to LianBio and as such, is not considered a performance obligation. 88 We will recognize the revenue associated with the license to develop and commercialize LYR-210, manufacturing activities related to the clinical supply of LYR-210, and the non-exclusive license to manufacture LYR-210 and obligation to transfer manufacturing technology in the case of a supply failure combined performance obligation as the clinical supply of LYR-210 is delivered.
Additionally, we determined that LianBio’s right of first refusal to obtain development and commercial rights in the licensed territories to LYR-220 is an option as any agreement would be negotiated at arm’s length and as a result does not provide a material right to LianBio and as such, is not considered a performance obligation. 87 We will recognize the revenue associated with the license to develop and commercialize LYR-210, manufacturing activities related to the clinical supply of LYR-210, and the non-exclusive license to manufacture LYR-210 and obligation to transfer manufacturing technology in the case of a supply failure combined performance obligation as the clinical supply of LYR-210 is delivered.
We anticipate that our expenses will increase significantly as we: • conduct additional clinical trials of our most advanced product candidate, LYR-210, including two ongoing pivotal Phase 3 clinical trials of LYR-210; • conduct a Phase 2 clinical trial of LYR-220; • continue to discover and develop additional product candidates; • establish manufacturing and supply chain capacity sufficient to provide commercial quantities of any product candidates for which we may obtain marketing approval; • seek regulatory and marketing approvals for product candidates that successfully complete clinical trials, if any; 86 • establish a sales, marketing, and distribution infrastructure to commercialize any products for which we may obtain regulatory approval in geographies in which we plan to commercialize our products ourselves; • maintain, expand and protect our intellectual property portfolio; • hire additional staff, including clinical, scientific, technical, regulatory, operational, financial, commercial and support personnel, to execute our business plan; and • add clinical, scientific, operational, financial and management information systems and personnel to support our product development and potential future commercialization efforts, and to enable us to operate as a public company.
We anticipate that our expenses will continue to increase significantly as we: • conduct additional clinical trials of our most advanced product candidate, LYR-210, including two ongoing pivotal Phase 3 clinical trials of LYR-210; • conduct a Phase 3 clinical trial of LYR-220; • continue to discover and develop additional product candidates; • establish manufacturing and supply chain capacity sufficient to provide commercial quantities of any product candidates for which we may obtain marketing approval; • seek regulatory and marketing approvals for product candidates that successfully complete clinical trials, if any; 85 • establish a sales, marketing, and distribution infrastructure to commercialize any products for which we may obtain regulatory approval in geographies in which we plan to commercialize our products ourselves; • maintain, expand and protect our intellectual property portfolio; • hire additional staff, including clinical, scientific, technical, regulatory, operational, financial, commercial and support personnel, to execute our business plan; and • add clinical, scientific, operational, financial and management information systems and personnel to support our product development and potential future commercialization efforts, and to enable us to operate as a public company.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 87 Financial Operations Overview Revenue To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 86 Financial Operations Overview Revenue To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future.
For example, a proportion of the stand-alone selling price is related to research and clinical trial work and development performed whereby revenue is 92 recognized as the underlying services are performed using a cost-to-cost model.
For example, a proportion of the stand-alone selling price is related to research and clinical trial work and development performed whereby revenue is recognized as the underlying services are performed using a cost-to-cost model.
All of these factors could impact our liquidity and future funding requirements, including but not limited to our ability to raise additional capital when needed on acceptable terms, if at all. The duration of this economic slowdown is uncertain and the impact on our business is difficult to predict.
All of these factors could impact our liquidity and future funding requirements, including but not limited to our ability to raise additional capital when needed on acceptable terms, if at all. The duration of any economic slowdown is uncertain and the impact on our business is difficult to predict.
We expect that our research and development expenses will continue to increase for the foreseeable future as we initiate additional 89 clinical trials, including two clinical trials for LYR-210 and one clinical trial for LYR-220, scale our manufacturing processes, and continue to discover and develop additional product candidates.
We expect that our research and development expenses will continue to increase for the foreseeable future as we initiate and conduct additional clinical trials, including two clinical trials for LYR-210 and one clinical trial for LYR-220, scale our manufacturing processes, and continue to discover and develop additional product candidates.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including the development of and pursuit of regulatory approval of our most advanced product candidate, LYR-210, for the treatment of CRS, which include: • employee-related expenses, including salaries, benefits, and stock-based compensation expense for personnel engaged in research and development functions; • expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with CROs, investigative sites, and consultants; • costs of manufacturing our product candidates for use in our clinical trials, including fees paid to CMOs as well as other manufacturers that provide components of our product candidates for use in our potential future clinical trials; • consulting and professional fees related to research and development activities; • costs related to compliance with clinical regulatory requirements; and • facility costs and other allocated expenses, which include expenses for rent and maintenance of our facility, utilities, depreciation, and other supplies; and • Impairment costs related to long-lived assets.
Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including the development of and pursuit of regulatory approval of our most advanced product candidate, LYR-210, for the treatment of CRS, which include: • employee-related expenses, including salaries, benefits, and stock-based compensation expense for personnel engaged in research and development functions; • expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with CROs, investigative sites, and consultants; • costs of manufacturing our product candidates for use in our clinical trials, including fees paid to CMOs as well as other manufacturers that provide components of our product candidates for use in our potential future clinical trials; • consulting and professional fees related to research and development activities; • costs related to compliance with clinical regulatory requirements; and • facility costs and other allocated expenses, which include expenses for rent and maintenance of our facility, utilities, depreciation, and other supplies; and • costs related to the termination of an agreement with a former contract manufacturer organization; and • impairment costs related to long-lived assets.
The following table provides information regarding our total cash, cash equivalents, and short-term investments at December 31, 2022 and 2021 (in thousands): As of December 31, 2022 2021 Cash and cash equivalents $ 32,550 $ 45,747 Short-term investments $ 65,344 $ — We currently have an effective shelf registration statement on Form S-3 (No. 333-256020) filed with the SEC on May 11, 2021, or the Form S-3, under which we may offer from time to time in one or more offerings any combination of 95 common and preferred stock, debt securities, warrants and units of up to $250.0 million in the aggregate.
The following table provides information regarding our total cash, cash equivalents, and short-term investments at December 31, 2023 and 2022 (in thousands): As of December 31, 2023 2022 Cash and cash equivalents $ 22,353 $ 32,550 Short-term investments $ 80,400 $ 65,344 We currently have an effective shelf registration statement on Form S-3 (No. 333-256020) filed with the SEC on May 11, 2021, or the Form S-3, under which we may offer from time to time in one or more offerings any combination of common and preferred stock, debt securities, warrants and units of up to $250.0 million in the aggregate.
Our future capital requirements will depend on many factors, including: • the costs of conducting future clinical trials of LYR-210 and LYR-220; • the costs of manufacturing additional material for one or more pivotal Phase 3 clinical trials of LYR-210 and a Phase 2 clinical trial of LYR-220 as well as potential future clinical studies we might conduct for our other product candidates; • the costs of scaling up our manufacturing process and supply chain capacity to provide sufficient quantities of LYR-210 and LYR-220 for the potential commercialization of LYR-210 and LYR-220 if our clinical development program is successful and we obtain marketing approval; • the scope, progress, results, and costs of discovery, preclinical development, laboratory testing, and clinical trials for other potential product candidates we may develop, if any; • the costs, timing, and outcome of regulatory review of our product candidates; • our ability to establish and maintain collaborations on favorable terms, if at all; • the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements we might have at such time; • the costs and timing of future commercialization activities, including product sales, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval; • the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; 97 • the costs of preparing, filing, and prosecuting patent applications, obtaining, maintaining, and enforcing our intellectual property rights, and defending intellectual property-related claims; • our headcount growth and associated costs as we expand our business operations, our research and development activities, and our manufacturing scale up; • the costs of operating as a public company; and • the cost of potential business interruptions resulting from COVID-19.
Our future capital requirements will depend on many factors, including: • the costs of conducting future clinical trials of LYR-210 and LYR-220; • the costs of manufacturing additional material for one or more pivotal Phase 3 clinical trials of LYR-210 and a Phase 3 clinical trial of LYR-220 as well as potential future clinical studies we might conduct for our other product candidates; • the costs of scaling up our manufacturing process and supply chain capacity to provide sufficient quantities of LYR-210 and LYR-220 for the potential commercialization of LYR-210 and LYR-220 if our clinical development program is successful and we obtain marketing approval; • the scope, progress, results, and costs of discovery, preclinical development, laboratory testing, and clinical trials for other potential product candidates we may develop, if any; • the costs, timing, and outcome of regulatory review of our product candidates; • our ability to establish and maintain collaborations on favorable terms, if at all; • the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements we might have at such time; • the costs and timing of future commercialization activities, including product sales, marketing, manufacturing, and distribution, for any of our product candidates for which we receive marketing approval; • the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; • the costs of preparing, filing, and prosecuting patent applications, obtaining, maintaining, and enforcing our intellectual property rights, and defending intellectual property-related claims; • our headcount growth and associated costs as we expand our business operations, our research and development activities, and our manufacturing scale up; • the costs of operating as a public company; and • the cost of potential business interruptions resulting from COVID-19. 98 Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales.
As part of the LianBio License Agreement, LianBio will also have the first right to obtain development and commercial rights in the licensed territories to our LYR-220 product candidate. We assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, LianBio, is a customer.
As part of the LianBio License Agreement, LianBio will also have the first right to obtain development and commercial rights in the licensed territories to our LYR-220 product candidate. We assessed this arrangement in accordance with ASC 606: Revenue from Contracts with Customers (“ASC 606”), and concluded that the contract counterparty, LianBio, is a customer.
The significant estimates in our accrued research and development expenses include the following costs incurred for services in connection with research and development activities for which we have not yet been invoiced: • vendors in connection with preclinical development activities; • vendors in connection with the testing of preclinical and clinical trial materials; • CROs in connection with preclinical and clinical studies; and • investigative sites in connection with clinical trials.
The significant estimates in our accrued research and development expenses include the following costs incurred for services in connection with research and development activities for which we have not yet been invoiced: • vendors in connection with preclinical development activities; • vendors in connection with the testing of preclinical and clinical trial materials; • CROs in connection with preclinical and clinical studies; and • investigative sites in connection with clinical trials. 92 We contract with CROs to conduct clinical and other research and development services on our behalf.
Revenue Recognition Under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.
Revenue Recognition Under ASC Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services.
From inception through December 31, 2022, we have raised an aggregate of $350.4 million to fund our operations, of which $162.1 million were gross proceeds from sales of our redeemable convertible preferred stock, $96.3 million were net proceeds from our April 2022 Financing (as defined below); $57.3 million were net proceeds from our initial public offering, $16.8 million were gross proceeds from government contracts and $17.0 million were gross proceeds from our license and collaboration agreement.
From inception through December 31, 2023, we have raised an aggregate of $416.1 million to fund our operations, of which $162.1 million were gross proceeds from sales of our redeemable convertible preferred stock, $96.3 million were net proceeds from our April 2022 Financing (as defined below), $46.5 million were net proceeds from our May 2023 Financing (as defined below), $57.3 million were net proceeds from our initial public offering, $16.8 million were gross proceeds from government contracts and $17.0 million were gross proceeds from the LianBio License Agreement.
Going Concern Evaluation and Presentation Based on our current operating plan, we believe that our current cash, cash equivalents, and short-term investments will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into mid-2024.
Going Concern Evaluation and Presentation Based on our current operating plan, we believe that our current cash, cash equivalents, and short-term investments will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2025.
CRS is an inflammatory disease of the paranasal sinuses which leads to debilitating symptoms and significant morbidities and affects approximately 14 million people in the United States. LYR-210 LYR-210 is designed to treat CRS patients both with and without nasal polyps who have failed previous medical management and have not undergone endoscopic sinus surgery.
CRS is an inflammatory disease of the paranasal sinuses which leads to debilitating symptoms and significant morbidities and affects approximately 14 million people in the United States. LYR-210 LYR-210 is designed to treat CRS patients who have failed previous medical management.
Cash Flows The following table provides information regarding our cash flows for the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 2021 Net cash used in operating activities $ (43,385 ) $ (25,820 ) Net cash used in investing activities (65,006 ) (3,385 ) Net cash provided by financing activities 96,257 359 Net decrease in cash, cash equivalents and restricted cash $ (12,134 ) $ (28,846 ) Net Cash Used in Operating Activities The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital.
Cash Flows The following table provides information regarding our cash flows for the years ended December 31, 2023 and 2022 (in thousands): 96 Year Ended December 31, 2023 2022 Net cash used in operating activities $ (63,304 ) $ (43,385 ) Net cash used in investing activities (12,584 ) (65,006 ) Net cash provided by financing activities 65,691 96,257 Net decrease in cash, cash equivalents and restricted cash $ (10,197 ) $ (12,134 ) Net Cash Used in Operating Activities The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges and changes in components of working capital.
Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.
In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.
Additionally, we will continue to incur increased expenses associated with being a public company, including costs of additional personnel, accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs, and investor and public relations costs. 90 Interest Income Interest income consists of interest income earned on our cash and cash equivalents and short-term investments.
Additionally, we will continue to incur increased expenses associated with being a public company, including costs of additional personnel, accounting, audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs, and investor and public relations costs.
A Phase 2 clinical trial of LYR-220, called BEACON, is currently ongoing. 85 Our Technology Our innovative and proprietary drug delivery technology is designed to locally and continuously deliver small molecule drugs to the affected tissue over a sustained period of time from a single administration.
A Phase 2 clinical trial of LYR-220, called BEACON, has recently concluded and topline data have been presented. 84 Our Technology Our innovative and proprietary drug delivery technology is designed to locally and continuously deliver small molecule drugs to the affected tissue over a sustained period of time from a single administration.
The increase in research and development expenses for the year ended December 31, 2022 was primarily attributable to an increase in clinical spend of $9.0 million as we progress along our clinical trials; an increase in employee related costs of $3.5 million as we increased research and development headcount, including an increase of $0.3 million of stock-based compensation; and a $0.4 million cost increase due to depreciation and shared allocation and support costs within research and development.
The increase in research and development expenses for the year ended December 31, 2023 was primarily attributable to an increase in clinical spend of $6.3 million as we progress our clinical trials; an increase in employee related costs of $4.6 million as we increased research and development headcount, a $0.4 million cost increase due to depreciation and shared allocation and support costs within research and development; and an increase in professional and consulting costs of $0.4 million related to additional research and development activities.
For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we may be required to expend significant additional financial resources and time on the completion of clinical development.
For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we may be required to expend significant additional financial resources and time on the completion of clinical development. 89 General and Administrative Expenses General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, and administrative functions.
Research and Development Expenses Research and development expense increased by $9.1 million to $38.8 million for the year ended December 31, 2022 from $29.7 million for the year ended December 31, 2021.
Research and Development Expenses Research and development expense increased by $9.2 million to $48.0 million for the year ended December 31, 2023 from $38.8 million for the year ended December 31, 2022.
We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.
We have based these estimates on assumptions that may prove to be imprecise or incorrect, and we may use our available capital resources sooner than we currently expect.
The technology is comprised of three interrelated components: • a biocompatible mesh scaffold, which is designed to maximize surface area for drug release while maintaining underlying tissue function; • an engineered elastomeric matrix, a polymeric matrix composed of polymers having elastic characteristics, which has advanced physical properties resulting in implants with “shape memory” that dynamically adapt to nasal anatomy; and • a versatile polymer-drug complex, which can be customized for the treatment of various chronic diseases treatable with ENT delivery to achieve the desired drug dose and drug elution rate.
The technology is comprised of three interrelated components: • a bioabsorbable mesh scaffold, which is designed to maximize surface area for drug release while maintaining underlying tissue function; • an engineered elastomeric matrix, a polymeric matrix composed of polymers having elastic characteristics, which has advanced physical properties resulting in implants with “shape memory” that dynamically adapt to nasal anatomy; and • a versatile polymer-drug complex, which is designed to deliver six months of continuous local drug therapy with a single treatment.
Our product candidates, LYR-210 and LYR-220, are bioresorbable polymeric matrices designed to be administered in a brief, non-invasive, in-office procedure and intended to deliver up to six months of continuous anti-inflammatory drug therapy to the sinonasal passages for the treatment of CRS.
Our product candidates, LYR-210 and LYR-220, are bioabsorbable nasal inserts designed to be administered in a simple in-office procedure and intended to deliver six months of continuous anti-inflammatory drug therapy to the sinonasal passages for the treatment of CRS with a single administration.
We have historically granted stock options with exercise prices equivalent to the fair value of our common stock as of the date of grant. 93 We account for stock-based awards to non-employees in accordance with ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , or ASU No. 2018-07, which simplifies the accounting for stock-based payments granted to non-employees for goods and services.
We account for stock-based awards to non-employees in accordance with ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , or ASU No. 2018-07, which simplifies the accounting for stock-based payments granted to non-employees for goods and services.
General and Administrative Expenses General and administrative expense increased by $3.4 million to $17.6 million for the year ended December 31, 2022 from $14.2 million for the year ended December 31, 2021.
General and Administrative Expenses General and administrative expense increased by $1.5 million to $19.1 million for the year ended December 31, 2023 from $17.6 million for the year ended December 31, 2022.
Net cash used in operating activities was $25.8 million for the year ended December 31, 2021, primarily resulting from our net loss of $43.5 million, partially offset by non-cash charges of $3.7 million and cash provided by changes in our operating assets and liabilities of $14.0 million.
Net cash used in operating activities was $63.3 million for the year ended December 31, 2023, primarily resulting from our net loss of $62.7 million, partially offset by non-cash adjustments of $4.3 million and cash used from changes in our operating assets and liabilities of $4.9 million.
Further, the global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
Adequate additional financing may not be available to us on acceptable terms, or at all. Further, the global economy, including credit and financial markets, has periodically experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
Liquidity and Capital Resources Sources of Liquidity We have funded our operations from inception through December 31, 2022 primarily with gross proceeds of $162.1 million from sales of our redeemable convertible preferred stock, net proceeds of $96.3 million from our April 2022 Financing, net proceeds of $57.3 million from our IPO, $16.8 million from government contracts and proceeds of $17.0 million from our license and collaboration agreement.
Liquidity and Capital Resources Sources of Liquidity From inception through December 31, 2023, we have raised an aggregate of $416.1 million to fund our operations, of which $162.1 million were gross proceeds from sales of our redeemable convertible preferred stock, $96.3 million were net proceeds from our April 2022 Financing (as defined below), $46.5 million were net proceeds from our May 2023 Financing (as defined below), $57.3 million were net proceeds from our initial public offering, $16.8 million were gross proceeds from government contracts and $17.0 million were gross proceeds from our license and collaboration agreement.
The increase in cash used in investing activities of $61.6 million was attributable to purchases of short-term investments. Net Cash Provided by Financing Activities Net cash provided by financing activities was $96.3 million for the year ended December 31, 2022 compared to $0.4 million for the year ended December 31, 2021.
Net Cash Used in Investing Activities Net cash used in investing activities was $12.6 million for the year ended December 31, 2023 compared to $65.0 million for the year ended December 31, 2022. The decrease in cash used in investing activities of $52.4 million was attributable to a decrease in the net purchase of short-term investments.
In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or amount of prepaid expense accordingly.
If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or amount of prepaid expense accordingly.
Our net losses were $55.3 million and $43.5 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $248.7 million.
Our net losses may fluctuate significantly from quarter to quarter and year to year and could be substantial. Our net losses were $62.7 million and $55.3 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $311.4 million.
Overview We are a clinical-stage biotechnology company focused on the development and commercialization of therapies for the localized treatment of patients with chronic rhinosinusitis, or CRS. Our proprietary technology is designed to consistently deliver medicines directly to the affected tissue for sustained periods with a single administration.
Overview We are a clinical-stage biotechnology company focused on the development and commercialization of innovative, anti-inflammatory therapies for the localized treatment of patients with chronic rhinosinusitis, or CRS.
We expect that our general and administrative expenses will increase in the future to support continued research and development activities and potential commercialization of our product candidates. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, attorneys, and accountants, among other expenses.
These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, attorneys, and accountants, among other expenses.
Under ASU No. 2018-07, most of the guidance on such payments to non-employees would be aligned with the requirements for stock-based payments granted to employees. Prior to January 1, 2019, we accounted for stock-based payments to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees , or ASC 505-50.
Under ASU No. 2018-07, most of the guidance on such payments to non-employees would be aligned with the requirements for stock-based payments granted to employees. Stock-based compensation arrangements to non-employees are accounted for in accordance with the applicable provisions of ASC 718 using a grant date fair value approach.
To date, we have recognized $1.6 million of collaboration revenue from our LianBio License Agreement.
As of December 31, 2023, we have recognized $3.2 million of collaboration revenue from our LianBio License Agreement.
Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 The following table summarizes our results of operations for the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, Dollar 2022 2021 Change Collaboration revenue $ 1,363 $ 285 $ 1,078 Operating expenses: Research and development 38,797 29,694 9,103 General and administrative 17,556 14,206 3,350 Loss on impairment of long-lived assets 1,316 — 1,316 Total operating expenses 57,669 43,900 13,769 Loss from operations (56,306 ) (43,615 ) (12,691 ) Other income: Interest income 1,041 102 939 Total other income 1,041 102 939 Net loss before taxes (55,265 ) (43,513 ) (11,752 ) Income tax expense (13 ) — (13 ) Net loss $ (55,278 ) $ (43,513 ) $ (11,765 ) 94 Collaboration Revenue The increase in collaboration revenue was a result of revenue recognized under the LianBio License Agreement.
Our policy is to recognize forfeitures as they occur. 93 Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, Dollar 2023 2022 Change Collaboration revenue $ 1,558 $ 1,363 $ 195 Operating expenses: Research and development 48,029 38,797 9,232 General and administrative 19,057 17,556 1,501 Loss on impairment of long-lived assets 1,592 1,316 276 Total operating expenses 68,678 57,669 11,009 Loss from operations (67,120 ) (56,306 ) (10,814 ) Other income: Interest income 4,499 1,041 3,458 Total other income 4,499 1,041 3,458 Loss before income tax expense (62,621 ) (55,265 ) (7,356 ) Income tax expense (59 ) (13 ) (46 ) Net loss $ (62,680 ) $ (55,278 ) $ (7,402 ) Collaboration Revenue The increase in collaboration revenue was a result of revenue recognized under the LianBio License Agreement.
LYR-220 is also designed to utilize MF, and employs a larger matrix designed for patients whose nasal cavity is enlarged due to sinus surgery.
LYR-220 employs a larger matrix designed for patients whose nasal cavity is larger including those patients whose nasal cavity is larger after having undergone ethmoid sinus surgery.
We contract with CROs to conduct clinical and other research and development services on our behalf. We base our expenses related to CROs on our estimates of the services received and efforts expended pursuant to quotes and contracts with them.
We base our expenses related to CROs on our estimates of the services received and efforts expended pursuant to quotes and contracts with them. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows.
A pivotal Phase 3 program of LYR-210, called the ENLIGHTEN program, consists of two pivotal trials and is currently ongoing. LYR-220 We are developing our second pipeline product candidate, LYR-220, for use in CRS patients who continue to require treatment to manage CRS symptoms despite having had sinus surgery.
LYR-220 Our second pipeline product candidate, LYR-220, is designed for use in CRS patients who have failed previous medical management and who continue to require treatment to manage CRS symptoms despite having had ethmoid sinus surgery.
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 CROs will exceed the level of services provided and result in a prepayment of the research and development expense.
There may be instances in which payments made to our CROs will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, and administrative functions. General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor, and public relations, accounting, auditing, tax services, and insurance costs.
General and administrative expenses also include direct and allocated facility-related costs as well as professional fees for legal, patent, consulting, investor, and public relations, accounting, auditing, tax services, and insurance costs. We expect that our general and administrative expenses will continue to increase in the future to support continued research and development activities and potential commercialization of our product candidates.
We have incurred significant net operating losses in every year since inception and expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year and could be substantial.
As of December 31, 2023, the Company sold 6,017,568 shares resulting in net proceeds of $19.1 million. We have incurred significant net operating losses in every year since inception and expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.
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 be forced to reduce or terminate our operations. As of December 31, 2022, we had cash and cash equivalents totaling $32.6 million and short-term investments of $65.3 million.
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 be forced to reduce or terminate our operations. Based on our current operating plan, management has concluded that there is substantial doubt regarding our ability to continue as a going concern.
Loss on Impairment of Long-Lived Assets We recognized $1.3 million related to loss on long-lived research and development assets. In October of 2022, we terminated an agreement with a contract manufacturer. We have funded certain leasehold improvements at the CMO’s facility that we do not anticipate receiving the benefit of in the future and have accordingly impaired the respective assets.
Prior to termination, we had funded certain leasehold improvements at the CMO’s facility that we do not anticipate receiving the 94 benefit of in the future and has accordingly impaired the respective assets.
The increase in general and administrative expenses for the year ended December 31, 2022 was primarily attributable to an increase in employee related fees of $3.7 million of which $2.3 million was attributed to stock-based compensation. These were partially offset by $0.7 million decrease in costs primarily public related which was driven by savings on D&O insurance.
The increase in general and administrative expenses for the year-ended December 31, 2023, were partially offset by a $1.0 million decrease in costs related to savings on D&O insurance. Loss on Impairment of Long-Lived Assets In October of 2022, we terminated an agreement with a contract manufacturer organization, or CMO.
The increase in cash provided by financing activities of $95.9 million was primarily attributable to the gross proceeds of $100.5 million resulting in net proceeds of $96.3 million from our April 2022 financing. See Note 7 to the consolidated financial statements included in this Annual Report on Form 10-K for a further discussion of the April 2022 Financing.
See Note 7 to the consolidated financial statements included in this Annual Report on Form 10-K for a further discussion of the Company's equity financings.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts. We expect that our existing cash, cash equivalents, and short-term investments will enable us to fund our operating expenses and capital expenditure requirements into mid-2024.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce, or eliminate our research and development programs or future commercialization efforts. 97 Management has concluded that there is substantial doubt regarding our ability to continue as a going concern based on our analysis under applicable accounting standards.
Our net loss was primarily attributed to research and development activities, and our general and administrative expenses. Our net non-cash charges during the year ended December 31, 2021 primarily consisted of $2.7 million of stock-based compensation expense and $1.0 million of depreciation expense.
Our net non-cash charges during the year ended December 31, 2023 primarily consisted of $5.9 million of share-based compensation expense, $1.6 million of non-cash loss on impairment of long-lived assets and $0.3 million of depreciation expense, which were partially offset by $3.5 million of net amortization of premiums on short-term investments.
Interest Income Interest income increased $0.9 million to $1.0 million for the year ended December 31, 2022 from $0.1 million for the year ended December 31, 2021.
This impairment evaluation related to the net book value of leasehold improvement and laboratory equipment assets held at the CMO. Interest Income Interest income increased $3.5 million to $4.5 million for the year ended December 31, 2023 from $1.0 million for the year ended December 31, 2022.
The increase in interest income was attributable to improved cash management and investment strategy as there was a higher cash balance allowing for investment opportunities in the advantageous rate environment for the year ended December 31, 2022.
The increase in interest income was attributable to higher cash balances and an improved cash management and investment strategy for the year ended December 31, 2023. Income Tax Expense During the year ended December 31, 2023 we recorded an income tax expense related to investment income of $59,000 related to our short-term investments held by our Massachusetts Securities Corporation.
The warrants are exercisable on and after April 13, 2022 and expire on April 12, 2027.
The warrants are exercisable on and after April 13, 2022 and expire on April 12, 2027. On May 25, 2023, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement"), with the purchasers named therein (the "Investors"), pursuant to which the Company agreed to sell securities to the Investors in a private placement (the "Private Placement").
We believe that our existing cash, cash equivalents, and short-term investments will enable us to fund our operating expenses and capital expenditure requirements into mid-2024. We have based these estimates on assumptions that may prove to be imprecise or incorrect, and we may use our available capital resources sooner than we currently expect.
As of December 31, 2023, we had cash and cash equivalents totaling $22.4 million and short-term investments of $80.4 million and management believes that our existing cash, cash equivalents, and short-term investments will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2025.
Removed
Operating Expenses Our operating expenses since inception have consisted solely of research and development costs and general and administrative costs.
Added
LYR-210 has a smaller dimension and is intended for patients with narrow anatomy, primarily patients who have not undergone ethmoid sinus surgery. A pivotal Phase 3 program of LYR-210, called the ENLIGHTEN program, consists of two pivotal trials and is currently ongoing.
Removed
Pursuant to ASC 505-50, we measured stock-based awards granted to non-employees at fair value as the awards vested and recognized the resulting value as expense during the period the related services were rendered, which was typically the vesting period.
Added
Further, the Company currently has an effective shelf registration statement on Form S-3 (No. 333-256020) filed with the SEC on May 11, 2021 (“Form S-3”), under which it may offer from time to time in one or more offerings any combination of common and preferred stock, debt securities, warrants and units of up to $250.0 million in the aggregate.
Removed
Our policy is to recognize forfeitures as they occur.
Added
LianBio announced that in October 2023 its Board of Directors commenced a comprehensive strategic review of its business. The LianBio Board ultimately concluded that selling off assets and winding down operations was the best way to realize maximum shareholder value.
Removed
These expenses were partially offset by a $2.5 million decrease in product development and manufacturing costs; and $1.1 million decrease in professional and consulting fees as many of these costs were absorbed by the increase in headcount.
Added
LianBio reported that a substantial portion of the wind down activities, including fulfillment of transition service obligations under its existing agreements and gradual cessation of currently active clinical trials, will be completed by the end of 2024.
Removed
As of December 31, 2022, we have not sold any securities under the Form S-3.
Added
LianBio announced in 2024 that it was further reducing the size of its workforce to approximately 50 employees with plans to reduce that number further over the course of 2024.
Removed
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success.
Added
LianBio stated it will maintain a core group of employees necessary to implement an orderly wind down and support its efforts to maximize the value of its remaining business and assets including the collaboration with the Company.
Removed
We have access to additional funds to be earned in connection with our LianBio License Agreement, if development activities are successful under that agreement.
Added
Due to these developments, the future of the Company’s collaboration with LianBio is uncertain as LianBio continues its wind down, while seeking a third party to acquire LianBio’s rights under the LianBio License Agreement. Operating Expenses Our operating expenses since inception have consisted solely of research and development costs and general and administrative costs.
Added
Interest Income Interest income consists of interest income earned on our cash and cash equivalents and short-term investments. Income Tax Expense Income tax consists of income tax related to the Company's Massachusetts Security Corporation. The Company has not recorded any benefits related to its operating losses due to uncertainty regarding future taxable income.
Added
We have historically granted stock options with exercise prices equivalent to the fair value of our common stock as of the date of grant.
Added
The increase in research and development expenses for the year-ended December 31, 2023 were partially offset by a $2.0 million decrease in product development and manufacturing costs related to bringing production efforts in-house; and a $0.6 million gain related to our legal settlement with a former contract manufacturer.

… 25 more changes not shown on this page.

Other LYRA 10-K year-over-year comparisons