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

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Paragraph-level year-over-year comparison of Viridian Therapeutics, Inc.\DE'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.

+627 added−447 removedSource: 10-K (2023-12-31) vs 10-K (2022-12-31)

Top changes in Viridian Therapeutics, Inc.\DE's 2023 10-K

627 paragraphs added · 447 removed · 349 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

135 edited+141 added−60 removed186 unchanged
Biggest changeOther companies that are advancing therapies for the treatment of TED in clinical development include ACELYRIN, Inc., argenx, Harbour BioMed, Immunovant, Inc., and Sling Therapeutics, Inc. • ACELYRIN, INC. is developing Lonigutamab (VB-421), a subcutaneously delivered anti-IGF-1R currently being evaluated in a Phase 1 study for TED. 11 • argenx is developing efgartigimod (Vyvgart®), an antibody fragment to target the neonatal Fc receptor (FcRn) expected to be evaluated in a registrational Phase 3 trial in patients with TED. • Immunovant and Harbour BioMed are developing batoclimab (IMVT-1401/HBM9161), a monoclonal antibody targeting FcRn currently being evaluated in an ongoing Phase 3 trial in patients with TED. • Sling Therapeutics, Inc. is developing linsitinib, a small molecule IGF-1R inhibitor currently be evaluated in an ongoing Phase 2b LIDS clinical trial in patients with active, moderate-to-severe TED.
Biggest changeA non-exhaustive list of other companies that are advancing therapies in clinical development for the treatment of TED or to target FcRn include: • ACELYRIN, INC. is developing lonigutamab (VB-421), a subcutaneously delivered anti-IGF-1R currently being evaluated in a Phase 1/2 study for TED. • Argenx is developing efgartigimod (“Vyvgart®”), an antibody fragment to target the neonatal Fc receptor (FcRn) that is subcutaneously delivered and expected to be evaluated in a registrational Phase 3 trial in patients with TED. • Immunovant and Harbour BioMed are developing batoclimab (IMVT-1401/HBM9161) and IMVT-1402.
As of March 2020, certain products previously approved as drugs under the FDCA, such as insulin and human growth hormone, are now deemed to be biologics under the PHSA, which means they may face competition through the biosimilars pathway and are not be eligible for the twelve-year period of exclusivity granted to new BLAs.
As of March 2020, certain products previously approved as drugs under the FDCA, such as insulin and human growth hormone, are now deemed to be biologics under the PHSA, which means they may face competition through the biosimilars pathway and are not eligible for the twelve-year period of exclusivity granted to new BLAs.
The U.S. federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS information related to payments or other transfers of value made to various healthcare professionals including physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
The U.S. federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to CMS information related to payments or other transfers of value to various healthcare professionals including physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
The Food and Drug Administration Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application for a biological product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial pediatric study plan (“PSA”), within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.
The Food and Drug Administration Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application for a biological product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial pediatric study plan, within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.
However, development in oncology was stopped in 2009 due to its failure to meet the primary efficacy endpoints in multiple myeloma. As described below, we have sublicensed the right to develop, manufacture, and commercialize certain IGF-1R directed antibody products for non-oncology indications in the greater area of China to Zenas BioPharma (Cayman) Limited.
However, development in oncology was stopped in 2009 due to its failure to meet the primary efficacy endpoints in multiple myeloma. As described below, we have sublicensed the right to develop, manufacture and commercialize 11 certain IGF-1R directed antibody products for non-oncology indications in the greater area of China to Zenas BioPharma (Cayman) Limited.
Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA.
Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, 24 corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA.
Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view of therapeutic innovation. Upon request, the CHMP can reduce the time frame to 150 days if the applicant provides sufficient justification for an accelerated assessment.
Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is expected 28 to be of a major public health interest, particularly from the point of view of therapeutic innovation. Upon request, the CHMP can reduce the time frame to 150 days if the applicant provides sufficient justification for an accelerated assessment.
The FCA imposes mandatory treble damages and per-violation civil penalties up to approximately $25,000. 24 HIPAA created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including private third-party payors, and making false statements relating to healthcare matters.
The FCA imposes mandatory treble damages and per-violation civil penalties up to approximately $25,000. HIPAA created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including private third-party payors, and making false statements relating to healthcare matters.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices (“GLP”) regulation; • submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; • approval by an independent institutional review board (“IRB”) or ethics committee at each clinical site before the trial is commenced; 13 • manufacture of the proposed biologic candidate in accordance with cGMPs; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”) requirements to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a biologics license application (“BLA”) after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMPs, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of a BLA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices (“GLP”) regulation; • submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; • approval by an independent institutional review board (“IRB”) or ethics committee at each clinical site before the trial is commenced; • manufacture of the proposed biologic candidate in accordance with current good manufacturing practice (“cGMP”); • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice (“GCP”) requirements to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; • preparation of and submission to the FDA of a biologics license application (“BLA”) after completion of all pivotal clinical trials; 19 • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMPs, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of a BLA to permit commercial marketing of the product for particular indications for use in the United States.
Because biologically sourced raw materials are subject to unique contamination risks, their use may be restricted in some countries. 19 Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries.
Because biologically sourced raw materials are subject to unique contamination risks, their use may be restricted in some countries. Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries.
An updated RMP must be 22 submitted: (i) at the request of EMA or a national competent authority, or (ii) whenever the risk-management system is modified, especially as the result of new information being received that may lead to a significant change to the benefit-risk profile or as a result of an important pharmacovigilance or risk-minimization milestone being reached.
An updated RMP must be submitted: (i) at the request of EMA or a national competent authority, or (ii) whenever the risk-management system is modified, especially as the result of new information being received that may lead to a significant change to the benefit-risk profile or as a result of an important pharmacovigilance or risk-minimization milestone being reached.
In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by federal and state legislative initiatives, including those designed to 25 limit the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-funded health care programs, and increased governmental control of drug pricing.
In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by federal and state legislative initiatives, including those designed to limit the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-funded health care programs, and increased governmental control of drug pricing.
Biosimilars and Reference Product Exclusivity 18 The Affordable Care Act (“ACA”) includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are highly similar, or “biosimilar,” to or interchangeable with an FDA-approved reference biological product.
Biosimilars and Reference Product Exclusivity The Affordable Care Act (“ACA”) includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created an abbreviated approval pathway for biological products that are highly similar, or “biosimilar,” to or interchangeable with an FDA-approved reference biological product.
Our pipeline of therapeutic programs represents a patient-centric model of innovation that leverages proven biology and antibody technology to reduce research and development risk, while striving to address strategic gaps related to access, delivery, quality of life, efficacy, and/or safety and tolerability in targeted therapeutic areas.
Our pipeline of therapeutic programs represents a patient-centric model of innovation that leverages proven biology and protein and antibody technology to reduce research and development risk, while striving to address strategic gaps related to access, delivery, quality of life, efficacy, and/or safety and tolerability in targeted therapeutic areas.
In May 2018, the Right to Try Act established a new regulatory 17 pathway to increase access to unapproved, investigational treatments for patients diagnosed with life-threatening diseases or conditions who have exhausted approved treatment options and who are unable to participate in a clinical trial.
In May 2018, the Right to Try Act established a new regulatory pathway to increase access to unapproved, investigational treatments for patients diagnosed with life-threatening diseases or conditions who have exhausted approved treatment options and who are unable to participate in a clinical trial.
At the EMA level, this is usually done in the form of scientific advice, which is given by the Committee for Medicinal Products for Human Use (“CHMP”) on the recommendation of the Scientific Advice Working Party (“SAWP”). A fee is incurred with each scientific advice procedure, but is significantly reduced for designated orphan medicines.
At the EMA level, this is usually done in the form of scientific advice, which is given by the Committee for Medicinal Products for Human Use (“CHMP”) on the recommendation of the Scientific Advice Working Party. A fee is incurred with each scientific advice procedure but is significantly reduced for designated orphan medicines.
If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information. Notwithstanding the submission of any 21 requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
It is characterized by inflammation within the orbit of the eye that can cause bulging of the eyes, redness and swelling, double vision, pain, and potential blindness. TED is a progressive disease consisting of an initial active phase, followed by a transition to a secondary chronic phase.
It is characterized by inflammation within the orbit of the eye that can cause bulging of the eyes, redness and swelling, double vision, pain, and potential blindness. TED is a progressive disease consisting of an initial active phase or active TED, followed by a transition to a secondary chronic phase or chronic TED.
Drug and Biologic Development Process Regardless of where they are conducted, all clinical trials included in applications for marketing authorization for human medicines in the European EU / EEA must have been carried out in accordance with EU regulations.
Drug and Biologic Development Process Regardless of where they are conducted, all clinical trials included in applications for marketing authorization for human medicines in the EU / EEA must have been carried out in accordance with EU regulations.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. 15 Before approving a BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. Before approving a BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.
The GDPR imposes a number of strict obligations and restrictions on the ability to process, including collecting, analyzing and transferring, personal data of individuals, in particular with respect to health data from clinical trials and adverse event reporting.
The GDPR imposes a number of strict obligations and restrictions on the ability to process, including collecting, analyzing and transferring, personal data of individuals, in particular 26 with respect to health data from clinical trials and adverse event reporting.
Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States may result in significant monetary fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater, other administrative penalties and a number of criminal offenses (punishable by uncapped fines) for organizations and, in certain cases, their directors and officers, as well as civil liability claims from individuals whose personal data was processed.
Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States may result in significant monetary fines for noncompliance of up to €20 million or 4% of the annual global turnover of the noncompliant company, whichever is greater, other administrative penalties and a number of criminal offenses (punishable by uncapped fines) for organizations and, in certain cases, their directors and officers, as well as civil liability claims from individuals whose personal data was processed.
Clinical Trials for VRDN-001 9 Phase 1/2 Trial of VRDN-001 in Patients with Active TED In the second half of 2022 and early 2023, we announced data from our Phase 1/2 clinical trial evaluating the safety and efficacy of VRDN-001 in patients with active TED.
Clinical Trials for VRDN-001 Phase 1/2 Trial of VRDN-001 in Patients with Active TED In the second half of 2022 and early 2023, we announced data from our Phase 1/2 clinical trial evaluating the safety and efficacy of VRDN-001 in patients with active TED.
Such laws include, without limitation: the federal Anti-Kickback Statute (“AKS”); the federal False Claims Act (“FCA”); the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and similar foreign, federal and state fraud, abuse and transparency laws.
Such laws include, without limitation: the 31 federal Anti-Kickback Statute (“AKS”); the federal False Claims Act (“FCA”); the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and similar foreign, federal and state fraud, abuse and transparency laws.
Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.
Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their 34 own methods and approval process apart from Medicare determinations.
If we fail to exercise an Option prior to expiration of the applicable Option Period, such Option for such Program will terminate. In consideration for Paragon’s grant of the Options to us, we paid to Paragon a non-refundable, non-creditable one-time fee of $2.5 million, which was recorded as research and development expense during the three months ended March 31, 2022.
If we fail to exercise an Option prior to expiration of the applicable Option Period, such Option for such Programs will terminate. In consideration for Paragon’s grant of the Options to us, we paid to Paragon a non-refundable, non-creditable one-time fee of $2.5 million, which was recorded as research and development expense during the three months ended March 31, 2022.
We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
We do not 36 intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be submitted to or approved by the relevant NCA and Ethics Committees.
Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be submitted to 27 or approved by the relevant NCA and Ethics Committees.
We may, at our sole discretion, exercise the Option with respect to specified programs at any time until the date that is 90 days after the Company’s receipt of the Final Deliverable the applicable program, or such longer period as agreed upon by the parties (“Option Period”) by delivering written notice of such exercise to Paragon.
We may, at our sole discretion, exercise the Option with respect to 18 specified programs (“Programs”) at any time until the date that is 90 days after the Company’s receipt of the Final Deliverable the applicable program, or such longer period as agreed upon by the parties (“Option Period”) by delivering written notice of such exercise to Paragon.
The FDA closely regulates the marketing, labeling, advertising and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
The FDA closely regulates the marketing, labeling, advertising and promotion of products. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
Regardless of which condition occurs first, the other condition develops within 18 months in 80% of patients. In addition to antibodies against TSHR, patients with TED also develop antibodies against IGF-1R. Insulin-like growth factor 1 (“IGF-1”) is a hormone similar in molecular structure to insulin with higher growth-promoting activity.
Regardless of which condition occurs first, the other condition develops within 18 months in 80% of patients. In addition to antibodies against TSHR, patients with TED also develop antibodies against IGF-1R. Insulin-like growth factor 1 is a hormone similar in molecular structure to insulin with higher growth-promoting activity.
The applicant will receive a fee reduction for the marketing authorization application if the orphan drug designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted, and sponsors must submit an annual report to EMA summarizing the status of development of the medicine.
The applicant will receive a fee reduction for the MAA if the orphan drug designation has been granted, but not if the designation is still pending at the time the marketing authorization is submitted, and sponsors must submit an annual report to EMA summarizing the status of development of the medicine.
ITEM 1. BUSINESS Company Overview We are a biopharmaceutical company focused on discovering and developing potential best-in-class medicines for serious and rare diseases. We target under-competitive disease areas where marketed therapies often leave room for improvements in efficacy, safety, and/or dosing convenience.
ITEM 1. BUSINESS Company Overview We are a biopharmaceutical company focused on discovering and developing potential best-in-class medicines for serious and rare diseases. We target disease areas where marketed therapies often leave room for improvements in efficacy, safety, and/or dosing convenience.
In consideration for the rights and licenses obtained under the first amendment, Viridian paid Paragon a non-refundable fee of $2.3 million (the “First Amendment Payment”), which was recorded as research and development expense during the three months ended December 31, 2022.
In consideration for the rights and licenses obtained under the first amendment, we paid Paragon a non-refundable fee of $2.3 million (the “First Amendment Payment”), which was recorded as research and development expense during the three months ended December 31, 2022.
The reports are also available at the SEC’s internet website at www.sec.gov. A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and the charters of the Audit Committee, Compensation Committee, and Nominative and Corporate Governance Committee are posted on our website, www.viridiantherapeutics.com, under “Corporate Governance.”
The reports are also available at the SEC’s internet website at www.sec.gov. A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and the charters of the Audit Committee, Compensation Committee, Nominative and Corporate Governance Committee and Science and Technology Committee are posted on our website, www.viridiantherapeutics.com, under “Corporate Governance.”
We have initially prioritized the development of therapies for the treatment of TED, a serious and debilitating rare autoimmune disease that causes inflammation within the orbit of the eye that can cause bulging of the eyes, redness and swelling, double vision, pain, and potential blindness.
We have first prioritized the development of therapies for the treatment of TED, a serious and debilitating rare autoimmune disease that causes inflammation within the orbit of the eye that can cause bulging of the eyes, redness and swelling, double vision, pain, and potential blindness.
The conduct of clinical trials in the EU is governed by the CTR, which entered into force on January 31, 2022. The CTR replaced the Clinical Trials Directive 2001/20/EC, (Clinical Trials Directive) and introduced a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU.
The conduct of clinical trials in the EU is governed by the CTR, which entered into force on January 31, 2022. The CTR replaced the Clinical Trials Directive 2001/20/EC, (“Clinical Trials Directive”) and introduced a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU.
The following activity was observed across all three dose groups (n=21) at week six: Proptosis • 71% proptosis responder rate, defined as a ≥2-millimeter (mm) reduction in proptosis from baseline as measured by exophthalmometry • 2.3 mm mean reduction in proptosis from baseline as measured by exophthalmometry • 2.76 mm mean reduction in proptosis from baseline as measured by blinded, centrally reviewed magnetic resonance imaging (“MRI”, preliminary data available for 16 of the 21 patients) Clinical Activity Score (“CAS”) • 4.1 point mean reduction in CAS from baseline on a 7-point measure of signs and symptoms of TED • 62% maximal or near-maximal therapeutic effect on CAS, defined as reaching a CAS of 0 or 1 on the 7-point composite measure of signs and symptoms of TED Overall response • 67% overall responder rate, defined as a ≥2 mm reduction in proptosis and a ≥2 point reduction in CAS Diplopia • 54% complete resolution of diplopia, defined as patients with baseline diplopia who achieved a score of 0 on the Gorman subjective diplopia scale (13 patients with diplopia at baseline) VRDN-001 had a favorable safety profile and was well-tolerated by all patients treated in the three dose cohorts.
The following activity was observed across all three dose groups (n=21) at week six: Proptosis • 71% proptosis responder rate, defined as a ≥2-millimeter (“mm”) reduction in proptosis from baseline as measured by exophthalmometry • 2.3 mm mean reduction in proptosis from baseline as measured by exophthalmometry • 2.76 mm mean reduction in proptosis from baseline as measured by blinded, centrally reviewed magnetic resonance imaging (“MRI”, preliminary data available for 16 of the 21 patients) CAS • 4.1 point mean reduction in CAS from baseline on a 7-point measure of signs and symptoms of TED • 62% maximal or near-maximal therapeutic effect on CAS, defined as reaching a CAS of 0 or 1 on the 7-point composite measure of signs and symptoms of TED Overall response • 67% overall responder rate, defined as a ≥2 mm reduction in proptosis and a ≥2 point reduction in CAS Diplopia • 54% complete resolution of diplopia, defined as patients with baseline diplopia who achieved a score of 0 on the Gorman subjective diplopia scale (13 patients with diplopia at baseline) VRDN-001 had a favorable safety profile and was generally well-tolerated.
Orphan drug designation must be requested before submitting an New Drug Application (“NDA”) or BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.
Orphan drug designation must be requested before submitting a New Drug Application (“NDA”) or BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.
At launch, Horizon Therapeutics plc announced a price of approximately $16,300 per vial of Tepezza® which translates to a list price of approximately $375,000 based on patient weight for a six-month course of therapy.
At launch, Horizon announced a price of approximately $16,300 per vial of Tepezza® which translates to a list price of approximately $375,000 based on patient weight for a six-month course of therapy.
An orphan medicinal product can also obtain an additional two years of market exclusivity for an orphan-designated condition 23 when the results of specific studies are reflected in the Summary of Product Characteristics (“SmPC”), addressing the pediatric population and completed in accordance with a fully compliant Pediatric Investigation Plan (“PIP”).
An orphan medicinal product can also obtain an additional two years of market exclusivity for an orphan-designated condition when the results of specific studies are reflected in the Summary of Product Characteristics, addressing the pediatric population and completed in accordance with a fully compliant Pediatric Investigation Plan.
Our multidisciplinary search process evaluates scientific and clinical validation of therapeutic targets, market potential, and feasibility of efficiently developing a competitive product. • Initial clinical development and commercial focus on thyroid eye disease (TED) : ◦ Rapidly advance VRDN-001 clinical development to enter the TED market quickly.
Our multidisciplinary search process evaluates scientific and clinical validation of therapeutic targets, market potential, and feasibility of efficiently developing a competitive product. • Initial clinical development and commercial focus on thyroid eye disease (TED) : 8 ◦ Advance intravenous VRDN-001 clinical development to enter the TED market quickly.
If steroid treatment proved to be inadequate, or could not be tolerated, the only remaining options for patients were orbital radiation or surgery to reduce swelling, decompress orbital contents, and protect the vision. Again, each of these therapies was incomplete and inadequate from the perspective of both patient and treating physician.
If steroid treatment proved to be inadequate, or could not be tolerated, remaining options for patients include orbital radiation or surgery to reduce swelling, decompress orbital contents, and protect the vision. Again, each of these therapies was considered incomplete or inadequate from the perspective of both the patient and the treating physician.
There are also requirements governing the reporting of ongoing preclinical studies and clinical trials and clinical study results to public registries. For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap. 14 • Phase 1.
There are also requirements governing the reporting of ongoing preclinical studies and clinical trials and clinical study results to public registries. For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap or be combined. • Phase 1.
Additionally, if we successfully commercialize any product candidate subject to the Xencor License Agreement, we are responsible for royalty payments equal to a percentage in the mid-single digits of net sales and commercial milestone payments of up to $25.0 million.
Additionally, if we successfully commercialize any product candidate subject to the ImmunoGen License Agreement, we are responsible for royalty payments equal to a percentage in the mid-single digits of net sales and commercial milestone payments of up to $95.0 million.
Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and potentially accelerated marketing authorization application assessment once a dossier has been submitted.
Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other 30 development program elements, and potentially accelerated MAA assessment once a dossier has been submitted.
With regard to the transfer of data from the EU to the United Kingdom, personal data may now freely flow from the EU to the UK since the UK is deemed to have an adequate data protection level.
With regard to the transfer of personal data from the EEA to the United Kingdom (“UK”), personal data may now freely flow from the EEA to the UK since the UK is deemed to have an adequate data protection level.
On January 31, 2023, submission of initial clinical trial applications via CTIS became mandatory, and by January 31, 2025, all ongoing trials approved under the former Clinical Trials Directive will need to comply with the CTR and have to be transitioned to CTIS.
Since January 31, 2023, submission of initial clinical trial applications via CTIS is mandatory, and by January 31, 2025, all ongoing trials approved under the former Clinical Trials Directive will need to comply with the CTR and have to be transitioned to CTIS.
Under the centralized procedure, the Committee for Medicinal Products for Human Use established at the EMA, is responsible for conducting the initial assessment of a drug. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization.
Under the centralized procedure, the CHMP established at the EMA, is responsible for conducting the initial assessment of a drug. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization.
Even when HIPAA does not apply, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.
Even when HIPAA does not apply, according to the Federal Trade Commission, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure, including medical and health-related information, may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.
Notwithstanding these provisions, the IRA’s impact on commercialization and competition remains largely uncertain. Manufacturing We do not own or operate clinical or commercial manufacturing facilities for the production of our product candidates that we develop, nor do we have plans to develop our own manufacturing operations in the foreseeable future.
Notwithstanding these provisions, the IRA’s impact on commercialization and competition remains largely uncertain. Manufacturing We do not own or operate clinical or commercial manufacturing facilities for the production of our product candidates, which include drug-device combination products that we develop, nor do we have plans to develop our own manufacturing operations in the foreseeable future.
Regulation in the European Union European Data Laws The collection and use of personal health data and other personal data in the European Union (“EU”) is governed by the provisions of the European General Data Protection Regulation 2016/679 (“GDPR”), which came into force in May 2018, and related data protection laws in individual EU Member States.
The collection and use of personal health data and other personal data in the European Union (“EU”) is governed by the provisions of the European General Data Protection Regulation 2016/679 (“GDPR”), which became applicable in May 2018, and related data protection laws in individual EU Member States.
Under both the former regime and the new CTR, national laws, regulations, and the applicable Good Clinical Practice, or GCP, and Good Laboratory Practice standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, or ICH, guidelines on Good Clinical Practice and the ethical principles that have their origin in the Declaration of Helsinki.
Under both the former regime and the new CTR, national laws, regulations, and the applicable GCP and GLP standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use guidelines on GCP and the ethical principles that have their origin in the Declaration of Helsinki.
Our most advanced program, VRDN-001, is a differentiated humanized monoclonal antibody targeting IGF-1R intravenously administered for the treatment for TED. In October 2022, we presented preclinical data from in-vitro studies demonstrating that VRDN-001 is a potentially differentiated full antagonist of IGF-1R, compared to teprotumumab’s incomplete antagonism of IGF-1R.
Our most advanced program, VRDN-001, is a differentiated humanized monoclonal antibody targeting IGF-1R intravenously administered for the treatment of TED. In previously presented in vitro preclinical data, we showed that VRDN-001 is a potentially differentiated full antagonist of IGF-1R, compared to teprotumumab’s incomplete antagonism of IGF-1R.
During the development of a medicinal product, the European Medical Agency, or EMA and national regulators within the EU provide the opportunity for dialogue and guidance on the development program.
During the development of a medicinal product, the EMA and national regulators within the EU provide the opportunity for dialogue and guidance on the development program.
TED significantly impacts quality of life, imposing a high burden on activities of daily living and mental health for patients suffering from the disease. TED is a progressive disease consisting of an initial active phase, followed by a transition to a secondary chronic phase. The only medicine approved by the U.S.
TED significantly impacts quality of life, imposing a high burden on activities of daily living and mental health for patients suffering from the disease. TED is a progressive disease consisting of an initial active phase (“active TED”), followed by a transition to a secondary chronic phase (“chronic TED”).
While any reduction or halt in supply from the CDMO could limit our ability to develop our product candidates until a replacement CDMO is found and qualified, we believe that we have sufficient supply to support our current clinical trial programs.
We do not currently have arrangements in place for redundant supply. While any reduction or halt in supply from the CDMO could limit our ability to develop our product candidates until a replacement CDMO is found and qualified, we believe that we have 35 sufficient supply to support our current clinical trial programs.
We believe that there are multiple opportunities to develop fast-follower therapeutics that improve on teprotumumab’s features, including dosing schedule and route of administration. We are developing three product candidates, VRDN-001, VRDN-002, and VRDN-003, that are being developed for intravenous (“IV”) or subcutaneous administration to treat patients who suffer from TED.
We believe that there are multiple opportunities to develop fast-follower therapeutics that improve on teprotumumab’s features, including dosing schedule, route of administration, and safety profile. We are developing two product candidates, VRDN-001 for intravenous (“IV”) and VRDN-003 for subcutaneous (“SC”) administration, to treat patients who suffer from TED.
The BPCIA is complex and continues to be interpreted and implemented by the FDA. In July 2018, the FDA announced an action plan to encourage the development and efficient review of biosimilars, including the establishment of a new office within the agency that will focus on therapeutic biologics and biosimilars.
In July 2018, the FDA announced an action plan to encourage the development and efficient review of biosimilars, including the establishment of a new office within the agency that will focus on therapeutic biologics and biosimilars.
Entities that are found to be in violation of HIPAA may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.
Entities that are found to be in violation of HIPAA may be subject to significant civil, criminal, and administrative fines and other penalties and/or additional reporting and oversight obligations, for example, if required to enter into a resolution agreement and corrective action plan with the U.S. Department of Health and Human Services to settle allegations of HIPAA non-compliance.
IGF-1R, the receptor for IGF-1, is highly expressed in fibrocytes, cells that are derived from the bone marrow and that have the potential to differentiate into either myofibroblasts or fat cells. IGF-1R and TSHR function in concert to regulate the proliferation and differentiation of fibrocytes in the orbital socket.
IGF-1R, the receptor for IGF-1, is highly expressed in fibrocytes, cells that are derived from the bone marrow and that have the potential to differentiate into either myofibroblasts or fat cells.
In addition, the Phase 1/2 clinical data reported from all three dose cohorts of VRDN-001 in patients with active TED (n=21), showed significant and rapid improvement in both signs and symptoms of TED after two infusions of VRDN-001.
We also conducted Phase 1/2 clinical trials of VRDN-001 in patients with active or chronic TED. In the active TED portion of the Phase 1/2 clinical trials, data reported from all three dose cohorts of VRDN-001 (n=21) showed significant and rapid improvement in both the signs and symptoms of TED after two infusions of VRDN-001 compared to placebo.
Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
These so-called Phase 4 studies may be made a condition to approval of the BLA. Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
(“Paragon”) (the “Paragon Agreement”) under which we and Paragon will cooperate to develop one or more antibodies.
(“Paragon”) under which we and Paragon will cooperate to develop one or more therapeutic proteins or antibodies.
Across all VRDN-001 treated patients in the trial, 71% were proptosis responders, 67% were overall responders, 62% achieved a clinical activity score (“CAS”) of 0 or 1, and 54% had complete resolution of their diplopia. VRDN-001 had a favorable safety profile and was well-tolerated by all patients treated in the three dose cohorts.
Across all VRDN-001 treated patients in the active TED trial, 71% were proptosis responders, 67% were overall responders, 62% achieved a clinical activity score (“CAS”) of 0 or 1, and 54% had complete resolution of their diplopia.
The sponsor of a fast track product has opportunities for more frequent interactions with the review team during product development and, once a BLA is submitted, the product may be eligible for priority review.
Fast track designation applies to the combination of the product and the specific indication for which it is being studied. The sponsor of a fast track product has opportunities for more frequent interactions with the review team during product development and, once a BLA is submitted, the product may be eligible for priority review.
We plan to cultivate a network across TED stakeholders to inform our patient-centric approach, including with patients and advocacy groups, key opinion leaders, research institutions, healthcare professionals and payers. ◦ Prepare for commercialization of the intravenously administered VRDN-001 and one of our subcutaneously administered candidates, VRDN-001, VRDN-002, or VRDN-003, for the treatment of patients with TED.
We plan to cultivate a network across TED stakeholders to inform our patient-centric approach, including with patients and advocacy groups, key opinion leaders, research institutions, healthcare professionals and payers. ◦ Prepare for commercialization of VRDN-001 and VRDN-003, for the treatment of patients with TED. We hold worldwide commercialization rights, excluding the greater area of China, to VRDN-001 and VRDN-003.
The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval.
The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites.
The IRA provides CMS with significant new authorities intended to curb drug costs and to encourage market competition. For the first time, CMS will be able to directly negotiate prescription drug prices and to cap out-of-pocket costs.
Department of Health and Human Services to negotiate prices of certain drugs with participating manufacturers in federal healthcare programs. The IRA provides CMS with significant new authorities intended to curb drug costs and to encourage market competition. For the first time, CMS will be able to directly negotiate prescription drug prices and to cap out-of-pocket costs.
In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations, govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners.
In the United States, there are several federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations that regulate the collection, use, disclosure, protection and processing of medical and health-related information. These laws could apply to our operations or the operations of our partners.
We expect that the THRIVE and THRIVE-2 Phase 3 trials will support global health authority registration for marketing approval in active and chronic TED, respectively.
We expect that the THRIVE and THRIVE-2 Phase 3 trials, together with a safety database comprising 300 treated patients will support global health authority registration for marketing approval in both active and chronic TED, respectively.
We currently depend on third-party contract manufacturers for all of our required raw materials, active pharmaceutical ingredients, and finished product candidates for our clinical trials. We do not have any current contractual arrangements for the manufacture of commercial supplies of our product candidates that we develop. We currently employ internal resources and third-party consultants to manage our manufacturing contractors.
We do not have any current contractual arrangements for the manufacture of commercial supplies of our product candidates that we develop. We currently employ internal resources and third-party consultants to manage our manufacturing contractors.
Current Treatments for TED Prior to 2020, moderate to severe cases of TED were treated off-label with steroids as daily doses of oral prednisone, or in more severe cases, weekly doses of IV methylprednisolone.
Exposure to other inflammatory agents, such as cigarette smoke, leads to exacerbation of the disease resulting in more severe symptoms. Current Treatments for TED Prior to 2020, moderate to severe cases of TED were treated off-label with steroids such as daily doses of oral prednisone, or in more severe cases, weekly doses of IV methylprednisolone.
This demonstrates that TED is a multi-billion-dollar market in the United States alone, with the potential for additional revenue in the United States with indication expansion to chronic TED and more convenient routes of administration. There is also potential for additional revenue following regulatory approvals and commercial expansion outside of the United States, which will accommodate multiple entrants.
This demonstrates that TED is currently a multi-billion-dollar market in the United States alone, with the potential for additional revenue in the United States with indication expansion to chronic TED and more convenient regimens and routes of administration.
In the 3 mg/kg dose cohort, nine patients were randomized to receive VRDN-001 to enable all consented patients who were eligible following screening to participate in the trial, and two patients were randomized to receive placebo.
We previously announced positive results from all three dose cohorts, and VRDN-001 demonstrated a favorable safety profile. In the 3 mg/kg dose cohort, nine patients were randomized to receive VRDN-001 to enable all consented patients who were eligible following screening to participate in the trial, and two patients were randomized to receive placebo.
We have built relevant expertise in monoclonal antibody discovery and engineering, biologics manufacturing, and nonclinical and clinical development for thyroid eye disease (“TED”) and other undisclosed target indications in rare and autoimmune diseases.
We have built relevant expertise in protein and antibody discovery and engineering, biologics manufacturing, nonclinical and clinical development for thyroid eye disease (“TED”), development of anti-neonatal Fc receptor (“FcRn”) therapies, and nonclinical and clinical development for indications in rare and autoimmune diseases.
Food and Drug Administration (“FDA”) for TED is Tepezza® (teprotumumab), which is an intravenously administered monoclonal antibody that targets insulin-like growth factor 1 receptor (“IGF-1R”). Tepezza® is marketed in the United States by Horizon Therapeutics plc.
The only medicine approved by the FDA for TED is Tepezza® (teprotumumab), which is an intravenously administered monoclonal antibody that targets insulin-like growth factor 1 receptor (“IGF-1R”). Tepezza® is marketed in the United States by Horizon Therapeutics plc (“Horizon”), which was acquired by Amgen in October 2023.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND.
One potential cause of TED is autoimmune antibodies against IGF-1R that lead to the activation of IGF-1R, resulting in increased proliferation, secretion of extracellular complex carbohydrates, and differentiation into fat cells. These antibodies, and 8 autoimmune antibodies to TSHR, can elicit an immune attack against the fibrocytes that surround the eye triggering the development of TED.
IGF-1R and TSHR function in concert to regulate the proliferation and differentiation of fibrocytes in the orbital socket. 10 One potential cause of TED is autoimmune antibodies against IGF-1R that lead to the activation of IGF-1R, resulting in increased proliferation, secretion of extracellular complex carbohydrates, and differentiation into fat cells.
Following the release of the data, we are planning to initiate a global Phase 3 trial in patients with chronic TED called THRIVE-2. We expect that the THRIVE and THRIVE-2 Phase 3 trials will support global health authority registration for marketing approval in both active and chronic TED, respectively.
We expect that the THRIVE and THRIVE-2 Phase 3 clinical trials, together with a safety database comprising 300 treated patients, will support global health authority registration for marketing approval in both active and chronic TED, respectively.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe do not have control over third-party manufacturers’ compliance with these regulations and standards. • We may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates. • Our third-party manufacturers could breach or terminate their agreement with us. • We may experience labor disputes or shortages, including from the effects of health emergencies (such as novel viruses or pandemics) and natural disasters. • Our third-party manufacturers may be impacted by global conflicts, including any potential conflict involving China and Taiwan, and any resulting trade sanctions.
Biggest changeWe do not have control over third-party manufacturers’ compliance with these regulations and standards. • We may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates. • Our third-party manufacturers could breach or terminate their agreement with us. • Our third-party manufacturers’ performance, available capacity and ability to manufacture clinical or commercial products may be impacted by mergers and or acquisitions. 48 • We may experience labor disputes or shortages, raw material shortages or manufacturing capacity shortages, including from the effects of health emergencies (such as novel viruses or pandemics) and natural disasters. • We and our third-party manufacturers may be impacted by global conflicts, including any potential conflict involving China and Taiwan, and any resulting trade sanctions. • We are heavily reliant on third-party manufacturing operations in China, and any disruption could negatively impact our clinical trials and development of our product candidates, which would harm our business. • Foreign third-party manufacturers may be subject to U.S. legislation or investigations, including the proposed BIOSECURE bill, trade restrictions and other foreign regulatory requirements, which could increase the cost or reduce the supply of material available to us, delay or prevent the procurement or supply of such material, delay clinical trials, or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential therapies.
Our success depends in large part on our and our licensors’ ability to obtain regulatory exclusivity and maintain patent and other intellectual property protection in the United States and in other countries with respect to our proprietary technologies and product candidates.
Our success depends in large part on our ability to obtain regulatory exclusivity and our and our licensors’ ability to maintain patent and other intellectual property protection in the United States and in other countries with respect to our proprietary technologies and product candidates.
The presence of varying types of claims in our patent portfolio significantly reduces, but may not eliminate, our exposure to potential validity challenges. For our U.S. patent applications, which contain claims entitled to priority after March 16, 2013, there is a greater level of uncertainty due to the the Leahy-Smith Act mentioned above.
The presence of varying types of claims in our patent portfolio significantly reduces, but may not eliminate, our exposure to potential validity challenges. For our U.S. patent applications, which contain claims entitled to priority after March 16, 2013, there is a greater level of uncertainty due to the Leahy-Smith Act mentioned above.
Collaborations may pose a number of risks, including: • collaborators often have significant discretion in determining the efforts and resources that they will apply to the collaboration and may not commit sufficient resources to the development, marketing, or commercialization of the product or products that are subject to the collaboration; • collaborators may not perform their obligations as expected; • any such collaboration may significantly limit our share of potential future profits from the associated program and may require us to relinquish potentially valuable rights to our current product candidates, potential products, proprietary technologies, or grant licenses on terms that are not favorable to us; • collaborators may cease to devote resources to the development or commercialization of our product candidates if the collaborators view our product candidates as competitive with their own products or product candidates; 43 • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation, or the course of development, might cause delays or termination of the development or commercialization of product candidates, and might result in legal proceedings, which would be time consuming, distracting, and expensive; • collaborators may be impacted by changes in their strategic focus or available funding, or business combinations involving them, which could cause them to divert resources away from the collaboration; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • the collaborations may not result in us achieving revenue to justify such transactions; and • collaborations may be terminated and, if terminated, may result in a need for us to raise additional capital to pursue further development or commercialization of the applicable product candidate.
Collaborations may pose a number of risks, including: • collaborators often have significant discretion in determining the efforts and resources that they will apply to the collaboration and may not commit sufficient resources to the development, marketing, or commercialization of the product or products that are subject to the collaboration; • collaborators may not perform their obligations as expected; • any such collaboration may significantly limit our share of potential future profits from the associated program and may require us to relinquish potentially valuable rights to our current product candidates, potential products, proprietary technologies, or grant licenses on terms that are not favorable to us; • collaborators may cease to devote resources to the development or commercialization of our product candidates if the collaborators view our product candidates as competitive with their own products or product candidates; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation, or the course of development, might cause delays or termination of the development or commercialization of product candidates, and might result in legal proceedings, which would be time consuming, distracting, and expensive; • collaborators may be impacted by changes in their strategic focus or available funding, or business combinations involving them, which could cause them to divert resources away from the collaboration; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability, which would be time consuming, distracting, and expensive; • the collaborations may not result in us achieving revenue to justify such transactions; and • collaborations may be terminated and, if terminated, may result in a need for us to raise additional capital to pursue further development or commercialization of the applicable product candidate.
If we are unable to raise additional capital when required or on acceptable terms, we may be required to: • significantly delay, scale back, or discontinue the development or commercialization of our product candidates; • seek strategic alliances, or amend existing alliances, for research and development programs at an earlier stage than otherwise would be desirable or that we otherwise would have sought to develop independently, or on terms that are less favorable than might otherwise be available in the future; • dispose of technology assets, or relinquish or license on unfavorable terms, our rights to technologies or any of our product candidates that we otherwise would seek to develop or commercialize ourselves; • pursue the sale of our company to a third party at a price that may result in a loss on investment for our stockholders; or • file for bankruptcy or cease operations altogether.
If we are unable to raise additional capital when required or on acceptable terms, we may be required to: • significantly delay, scale back, or discontinue the development or commercialization of our product candidates; • seek strategic alliances, or amend existing alliances, for research and development programs at an earlier stage than otherwise would be desirable or that we otherwise would have sought to develop independently, or on terms that are less favorable than might otherwise be available in the future; 37 • dispose of technology assets, or relinquish or license on unfavorable terms, our rights to technologies or any of our product candidates that we otherwise would seek to develop or commercialize ourselves; • pursue the sale of our company to a third party at a price that may result in a loss on investment for our stockholders; or • file for bankruptcy or cease operations altogether.
See “Business—Other Regulations.” 39 If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including significant civil, criminal, and administrative penalties, disgorgement, damages, fines, contractual damages, reputational harm, diminished profits and future earnings, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, imprisonment, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
See “Business—Other Regulations.” If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including significant civil, criminal, and administrative penalties, disgorgement, damages, fines, contractual damages, reputational harm, diminished profits and future earnings, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, imprisonment, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
Even if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, potentially significant negative consequences could result, including but not limited to: • regulatory authorities may withdraw approvals of such products; • regulatory authorities may require additional warnings on the drug label; • we may be required to create a REMS, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, and/or other elements to assure safe use; • we could be sued and held liable for harm caused to patients or subjects; and • our reputation may suffer.
Even if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, potentially significant negative consequences could result, including but not limited to: • regulatory authorities may withdraw approvals of such products; • regulatory authorities may require additional warnings on the drug label; • we may be required to create a REMS, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, and/or other elements to assure safe use; 42 • we could be sued and held liable for harm caused to patients or subjects; and • our reputation may suffer.
These and other requirements could require us or our collaborators to incur additional costs to achieve compliance, limit our competitiveness, necessitate the acceptance of more onerous obligations in our contracts, restrict our ability to use, store, transfer, and process data, impact our or our collaborators’ ability to process or use data in order to support the provision of our products or services, affect our or our collaborators’ ability to offer our products and services or operate in certain locations, cause regulators to reject, limit, or disrupt our clinical trial activities, result in increased expenses, reduce overall demand for our products and services and make it more difficult to meet expectations of or commitments to customers or collaborators.
These and other requirements could require us or our collaborators to incur additional costs to achieve compliance, limit our competitiveness, necessitate the acceptance of more onerous obligations in our contracts, restrict our ability to use, store, transfer, and process data, impact our or our collaborators’ ability to process or use data in order to support the provision of our products or services, affect our or our collaborators’ ability to offer our products and services or operate in certain locations, cause regulators to reject, limit, or 59 disrupt our clinical trial activities, result in increased expenses, reduce overall demand for our products and services and make it more difficult to meet expectations of or commitments to customers or collaborators.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited.
Our ability to raise additional funds will depend, in part, on the success of our preclinical studies and clinical trials and other product development activities, regulatory events, our ability to identify and enter into licensing or other strategic arrangements, and other events or conditions 29 that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control.
Our ability to raise additional funds will depend, in part, on the success of our preclinical studies and clinical trials and other product development activities, regulatory events, our ability to identify and enter into licensing or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control.
If any of our product candidates are approved, we will be subject to ongoing regulatory requirements with respect to manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing clinical trials, and submission of safety, efficacy, and other post-approval information, including both federal and state requirements in the United States, and requirements of comparable foreign regulatory authorities.
If any of our product candidates are approved, we will be subject to ongoing regulatory requirements with respect to manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing clinical trials, and submission of safety, efficacy, and other post-approval information, including both federal and state requirements in the United States, and requirements of the EMA and comparable foreign regulatory authorities.
This may make it difficult for VRDN-001 or any other future products to compete with these products. If our competitors obtain marketing approval from the FDA or comparable foreign regulatory authorities for their product candidates more rapidly than us, it could result in our competitors establishing a strong market position before we are able to enter the market.
This may make it difficult for VRDN-001 or any other future products to compete with these products. If our competitors obtain marketing approval from the FDA, EMA, or comparable foreign regulatory authorities for their product candidates more rapidly than us, it could result in our competitors establishing a strong market position before we are able to enter the market.
This, in turn, could require notification under applicable data privacy regulations or contracts, and could lead to litigation, governmental audits, investigations, fines, penalties, and other possible liability, damage our relationships with our collaborators, trigger indemnification and other contractual obligations, cause us to incur investigation, mitigation and remediation expenses, and have a negative impact on our ability to conduct clinical trials.
This, in turn, could require notification under applicable data privacy regulations or contracts, and could lead to litigation, governmental audits, investigations, fines, penalties, and other possible liability, damage our relationships with our collaborators, trigger indemnification and other contractual obligations, cause us to incur investigation, mitigation and remediation expenses, have a negative impact on our ability to conduct clinical trials, and cause reputational damage.
Accordingly, we may not be able to identify, recruit, enroll, and maintain a sufficient number of patients or subjects to complete our future clinical trials in a timely manner because of the perceived risks and benefits of the product candidate under study, the availability and efficacy of competing therapies and clinical trials, the option for patients to choose alternate existing approved therapies, and the willingness of physicians to participate in our planned clinical trials.
Accordingly, we may not be able to identify, recruit, enroll and maintain a sufficient number of patients or subjects to complete our clinical trials in a timely manner because of the perceived risks and benefits of the product candidate under study, the availability and efficacy of competing therapies and clinical trials, the option for patients to choose alternate existing approved therapies and the willingness of physicians to participate in our planned clinical trials.
If any 46 patents or patent applications cover our product candidates or technologies, we may not be free to manufacture or market our product candidates as planned, absent such a license, which may not be available to us on commercially reasonable terms, or at all. It is also possible that we have failed to identify relevant third-party patents or applications.
If any patents or patent applications cover our product candidates or technologies, we may not be free to manufacture or market our product candidates as planned, absent such a license, which may not be available to us on commercially reasonable terms, or at all. It is also possible that we have failed to identify relevant third-party patents or applications.
Because we have limited financial and human resources, we may forgo or delay pursuit of opportunities with some programs or product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or more profitable market opportunities.
Because we have limited financial and human resources, we may forgo or delay the pursuit of opportunities with some programs or product candidates or for other indications, that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or more profitable market opportunities.
Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. tax expense.
Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact 66 on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. tax expense.
The degree of market acceptance of any of our products will depend on a number of factors, including but not limited to: • the efficacy of the product as demonstrated in clinical trials and potential advantages over competing treatments; 50 • the prevalence and severity of the disease and any side effects; • the clinical indications for which approval is granted, including any limitations or warnings contained in a product’s approved labeling; • the convenience and ease of administration; • the cost of treatment; • the willingness of the patients and physicians to accept these therapies; • the perceived ratio of risk and benefit of these therapies by physicians and the willingness of physicians to recommend these therapies to patients based on such risks and benefits; • the marketing, sales, and distribution support for the product; • the publicity concerning our products or competing products and treatments; and • the pricing and availability of third-party payor coverage and adequate reimbursement.
The degree of market acceptance of any of our products will depend on a number of factors, including but not limited to: • the efficacy or safety of the product as demonstrated in clinical trials and potential advantages over competing treatments; • the prevalence and severity of the disease and any side effects; • the clinical indications for which approval is granted, including any limitations or warnings contained in a product’s approved labeling; • the convenience and ease of administration; • the cost of treatment; • the willingness of the patients and physicians to accept these therapies; • the perceived ratio of risk and benefit of these therapies by physicians and the willingness of physicians to recommend these therapies to patients based on such risks and benefits; • the marketing, sales, and distribution support for the product; • the publicity concerning our products or competing products and treatments; and • the pricing and availability of third-party payor coverage and adequate reimbursement.
See “Business—Government Regulation and Product Approvals—Expedited Development and Review Programs.” We may seek Fast Track designation for one or more of our product candidates, but we might not receive such designation, and even if we do, such designation may not actually lead to a faster development or regulatory review or approval process.
See “Business—Government Regulation—Expedited Development and Review Programs.” We may seek Fast Track designation for one or more of our product candidates, but we might not receive such designation, and even if we do, such designation may not actually lead to a faster development or regulatory review or approval process.
We expect that additional state and federal healthcare reform measures will be adopted in the future, particularly in light of the new presidential administration, any of which could limit the amounts that federal and state governments will pay for healthcare therapies, which could result in reduced demand for our product candidates or additional pricing pressures.
We expect that additional state and federal healthcare reform measures will be adopted in the future, particularly in light of the new presidential administration, any of which could limit the amounts that federal and state governments will pay for healthcare therapies, which could result in 58 reduced demand for our product candidates or additional pricing pressures.
A failure to obtain accelerated approval or any other form of expedited review or approval for a 38 product candidate could result in a longer time period prior to commercializing such product candidate, increase the cost of development of such product candidate, and harm our competitive position in the marketplace.
A failure to obtain accelerated approval or any other form of expedited review or approval for a product candidate could result in a longer time period prior to commercializing such product candidate, increase the cost of development of such product candidate, and harm our competitive position in the marketplace.
However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, or results of operations.
The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, or results of operations.
Numerous third-party U.S. and non-U.S. issued patents and pending applications exist in the area of our product candidates. From time to time, we may also monitor these patents and patent applications. We may in the future pursue available proceedings in the U.S. and foreign patent offices to challenge the validity of these patents and patent applications.
Numerous third-party U.S. and non-U.S. issued patents and pending applications exist in the area of our product candidates. From time to time, we may also monitor these patents and patent applications. We may in the future pursue available proceedings in the U.S. and foreign patent offices to challenge these patents and patent applications.
Any one or more of such factors could directly or indirectly cause 28 our actual results of operations and financial condition to vary materially from past or anticipated future results of operations and financial condition. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, results of operations, and stock price.
Any one or more of such factors could directly or indirectly cause our actual results of operations and financial condition to vary materially from past or anticipated future results of operations and financial condition. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, results of operations, and stock price.
There is no way to know if we will be able to continue to obtain product liability coverage and obtain expanded coverage, if we require it, in sufficient amounts to protect us against losses due to liability, on acceptable terms, or at all.
There is no way to know if we will be able to 45 continue to obtain product liability coverage and obtain expanded coverage, if we require it, in sufficient amounts to protect us against losses due to liability, on acceptable terms, or at all.
Although we endeavor to comply with our published policies and other 40 documentation, we may at times fail to do so or may be perceived to have failed to do so. Moreover, despite our efforts, we may not be successful in achieving compliance if our employees or vendors fail to comply with our published policies and documentation.
Although we endeavor to comply with our published policies and other documentation, we may at times fail to do so or may be perceived to have failed to do so. Moreover, despite our efforts, we may not be successful in achieving compliance if our employees or vendors fail to comply with our published policies and documentation.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 48 We may not be able to protect our intellectual property rights throughout the world.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. We may not be able to protect our intellectual property rights throughout the world.
We will be required to report adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation could result in delays in product development or commercialization, or increased costs to assure compliance.
We will be required to report adverse reactions and production problems, if any, to the FDA, EMA, and comparable foreign regulatory authorities. Any new legislation could result in delays in product development or commercialization, or increased costs to assure compliance.
Additional patent terms may be available through a patent term adjustment (“PTA”) process, resulting from the United States Patent and Trademark Office (“USPTO”) delays during prosecution. Although various extensions may be available, the life of a patent, and the protection it affords, is limited.
Additional patent terms may be available through a patent term adjustment process, resulting from the United States Patent and Trademark Office (“USPTO”) delays during prosecution. Although various extensions may be available, the life of a patent, and the protection it affords, is limited.
In addition to threats from natural disasters, telecommunications and electrical failures, traditional computer hackers, malicious code (such as malware, viruses, worms, and ransomware), employee error, theft or misuse, password spraying, phishing, and distributed denial-of-service (“DDOS”) attacks, we now also face threats from sophisticated nation-state and nation-state supported actors who engage in attacks (including advanced persistent threat intrusions) that add to the risks to our internal networks, our third-party service providers, our collaborators and the information that they store and process.
In addition to threats from natural disasters, telecommunications and electrical failures, traditional computer hackers, malicious code (such as malware, viruses, worms, and ransomware), employee error, theft or misuse, password spraying, phishing, and distributed denial-of-service attacks, we now also face threats from sophisticated nation-state and nation-state supported actors who engage in attacks (including advanced persistent threat intrusions) that add to the risks to our internal networks and systems, our third-party service providers, our collaborators and the information that they store and process.
This may be because our product candidates and programs may be deemed to be at too early of a stage of development for collaborative effort, our research and development pipeline may be viewed as insufficient, the competitive or intellectual property landscape may be viewed as too intense or risky, and/or third parties may not view our product candidates and programs as having sufficient potential for commercialization, including the likelihood of an adequate safety and efficacy profile. 49 Even if we are able to successfully enter into a collaboration regarding the development or commercialization of our product candidates, we cannot guarantee that such a collaboration will be successful.
This may be because our product candidates and programs may be deemed to be at too early of a stage of development for collaborative effort, our research and development pipeline may be viewed as insufficient, the competitive or intellectual property landscape may be viewed as too intense or risky, and/or third parties may not view our product candidates and programs as having sufficient potential for commercialization, including the likelihood of an adequate safety and efficacy profile. 60 Even if we are able to successfully enter into a collaboration regarding the development or commercialization of our product candidates, we cannot guarantee that such a collaboration will be successful.
In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional nonclinical studies and the results obtained from studying such new formulation may not be consistent with previous results obtained.
In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional clinical or nonclinical studies and the results obtained from studying such new formulation may not be consistent with previous results obtained.
We and our CROs and other vendors are required to comply with all applicable laws, regulations, and guidelines, including those required by the FDA and comparable foreign regulatory authorities for all of our product candidates in clinical development.
We and our CROs and other vendors are required to comply with all applicable laws, regulations, and guidelines, including those required by the FDA, EMA, and comparable foreign regulatory authorities for all of our product candidates in clinical development.
The timing of our clinical trials depends in part on the rate at which we can recruit patients or subjects to participate in clinical trials of our product candidates, and we may experience delays in our clinical trials if we encounter difficulties in 35 enrollment.
The timing of our clinical trials depends in part on the rate at which we can recruit patients or subjects to participate in clinical trials of our product candidates, and we may experience delays in our clinical trials if we encounter difficulties in enrollment.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of Nasdaq. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures 69 and internal control over financial reporting.
The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent 45 litigation.
The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation.
A takeover of us may trigger the requirement 55 that we redeem the warrants, which could make it more costly for a potential acquirer to engage in a business combination transaction with us.
A takeover of us may trigger the requirement that we redeem the warrants, which could make it more costly for a potential acquirer to engage in a business combination transaction with us.
If we choose to pursue accelerated approval, there can be no assurance that the FDA will agree that our proposed primary endpoint is an appropriate surrogate endpoint.
If we choose to pursue accelerated approval, there can be no assurance that the FDA will agree that our proposed primary endpoint is an appropriate surrogate 57 endpoint.
General Risk Factors The market price of our common stock has historically been volatile, and the market price of our common stock may drop in the future. 56 The market price of our common stock has been, and may continue to be, subject to significant fluctuations.
General Risk Factors The market price of our common stock has historically been volatile, and the market price of our common stock may drop in the future. The market price of our common stock has been, and may continue to be, subject to significant fluctuations.
Any product liability claim brought against us, with or without merit, could result in: • withdrawal of clinical trial volunteers, investigators, patients or subjects, or trial sites, or limitations on approved indications; 36 • the inability to commercialize, or if commercialized, decreased demand for, our product candidates; • if commercialized, product recalls, labeling, marketing or promotional restrictions, or the need for product modification; • initiation of investigations by regulators; • loss of revenue; • substantial costs of litigation, including monetary awards to patients or other claimants; • liabilities that substantially exceed our product liability insurance, which we would then be required to pay ourselves; • an increase in our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, if at all; • the diversion of management’s attention from our business; and • damage to our reputation and the reputation of our products and our technology.
Any product liability claim brought against us, with or without merit, could result in: • inability to recruit clinical trial volunteers, investigators, patients or subjects, or trial sites; • withdrawal of clinical trial volunteers, investigators, patients or subjects, or trial sites, or limitations on approved indications; • delay in the development of product candidates; • the inability to commercialize, or if commercialized, decreased demand for, our product candidates; • if commercialized, product recalls, labeling, marketing or promotional restrictions, or the need for product modification; • initiation of investigations by regulators; • loss of revenue; • substantial costs of litigation, including monetary awards to patients or other claimants; • liabilities that substantially exceed our product liability insurance, which we would then be required to pay ourselves; • an increase in our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, if at all; • the diversion of management’s attention from our business; and • damage to our reputation and the reputation of our products and our technology.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as 55 federal and state laws in the United States.
In addition, he Certificate of Designation of our Series A Preferred Stock and the provisions of our warrants issued in 2020 may delay or prevent a change in control of our company.
In addition, the Certificate of Designation of our Series A Preferred Stock and the provisions of our warrants issued in 2020 may delay or prevent a change in control of our company.
We currently generate no revenue from sales of any products, and we may never be able to develop or commercialize a product candidate. We continue to evaluate and pursue additional opportunities to expand our product pipeline, either by discovering novel antibodies internally, or by acquiring rights to existing antibodies or antibody sequences.
We currently generate no revenue from sales of any products, and we may never be able to develop or commercialize a product candidate. We continue to evaluate and pursue additional opportunities to expand our product pipeline, either by discovering novel antibodies or proteins internally, or by acquiring rights to existing antibodies or antibody sequences or proteins and protein sequences.
As of December 31, 2022, a majority of the then outstanding shares of Series A Preferred Stock was held by entities affiliated with one stockholder. This provision of the Certificate of Designation may make it more difficult for us to enter into any of the aforementioned transactions.
As of December 31, 2023, a majority of the then outstanding shares of Series A Preferred Stock was held by entities affiliated with one stockholder. This provision of the Certificate of Designation may make it more difficult for us to enter into any of the aforementioned transactions.
In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our profitability and reputation.
In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our business and reputation.
Although we have product liability insurance, which covers our historical clinical trials in the United States, for up to $5.0 million per occurrence, up to an aggregate limit of $5.0 million, our insurance may be insufficient to reimburse us for any expenses or losses we may suffer.
Although we have product liability insurance, which covers our historical clinical trials in the United States, for up to $10.0 million per occurrence, up to an aggregate limit of $10.0 million, our insurance may be insufficient to reimburse us for any expenses or losses we may suffer.
However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated.
However, there is a risk that this exclusivity could be shortened in the future due to congressional action or otherwise, or that the FDA will not consider the subject product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated.
Our manufacturing process is susceptible to product loss or failure, or product variation that may negatively impact patient outcomes, due to logistical issues associated with preparing the product for administration, infusing the patient with the product, manufacturing issues, or different product characteristics resulting from the inherent differences in starting materials, variations between reagent lots, interruptions in the manufacturing process, contamination, equipment or reagent failure, improper installation or operation of equipment and/or programs, vendor or operator error and variability in product characteristics.
Our manufacturing process is susceptible to product loss or failure, or product variation that may negatively impact patient outcomes, due to logistical issues associated with preparing the product for administration, infusing the patient with the product, manufacturing issues, or different product characteristics resulting from the inherent differences in starting materials, variations between reagent lots, interruptions in the manufacturing process, contamination, equipment or reagent failure, improper installation or operation of equipment and/or programs, vendor or operator error, loss of product during shipment or storage and variability in product characteristics.
An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to us from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms.
An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to us from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms or offer us a license at all.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies 33 or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions, for example, under a REMS program.
In addition, the approval of a biologic product biosimilar to one of our product candidates could have a material adverse impact on our business as it may be significantly less costly to bring to market and may be priced significantly lower than our product candidates.
The approval of a biologic product biosimilar to one of our product candidates could have a material adverse impact on our business as it may be significantly less costly to bring to market and may be priced significantly lower than our product candidates.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products, or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products, cease development or commercialization, or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
Even if patents do successfully issue, and even if such patents cover our product candidates, third parties may challenge their validity, enforceability, or scope, which may 44 result in such patents being narrowed, found unenforceable, or invalidated.
Even if patents do successfully issue, and even if such patents cover our product candidates, third parties may challenge their validity, enforceability, or scope, which may result in such patents being narrowed, found unenforceable, unpatentable, or invalidated.
In addition, in 2011 the United States enacted the Leahy-Smith America Invents Act (the “Leahy-Smith Act”) and is still currently implementing wide-ranging patent reform legislation. Recent rulings from the U.S.
In addition, in 2011 the U.S. enacted the Leahy-Smith America Invents Act (the “Leahy-Smith Act”) and is still currently implementing wide-ranging patent reform legislation. Recent rulings from the U.S.
We believe that our current cash, cash equivalents and short-term investments, including the Term Loan, will be sufficient to fund our operations, including our clinical development plan described elsewhere in this Annual Report, into the second half of 2025. We will need to raise additional capital to continue to fund our operations and service our obligations in the future.
We believe that our current cash, cash equivalents and short-term investments will be sufficient to fund our operations, including our clinical development plan described elsewhere in this Annual Report, into the second half of 2026. We will need to raise additional capital to continue to fund our operations and service our obligations in the future.
If we or any of our CROs or vendors fail to comply with applicable laws, regulations, and guidelines, the results generated in our clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
If we or any of our CROs or vendors fail to comply with applicable and evolving laws, regulations, and guidelines, the results generated in our clinical trials may be deemed insufficient or unreliable, and the FDA, EMA, or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
Our most recent 54 analysis of possible ownership changes was completed for certain tax periods ending through December 31, 2022. It is possible that we have in the past undergone and may in the future undergo, additional ownership changes that could result in additional limitations on our NOL and tax credit carryforwards.
Our most recent analysis of possible ownership changes was completed for certain tax periods ending through December 31, 2023. It is possible that we have in the past undergone and may in the future undergo, additional ownership changes that could result in additional limitations on our NOL and tax credit carryforwards.
We rely and expect to continue to rely on third parties to manufacture our clinical product supplies, and we intend to rely on third parties to produce and process our product candidates, if approved, and our commercialization of any of our product candidates could be stopped, delayed, or made less profitable if those third parties fail to obtain approval of government regulators, fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or prices.
We rely and expect to continue to rely on third parties to manufacture our clinical product supplies, including devices and device components, and we intend to rely on third parties to produce and process our product candidates, if approved, and our commercialization of any of our product candidates could be stopped, delayed, or made less profitable if those third parties fail to obtain approval of government regulators, fail to provide us with sufficient quantities of drug product, devices, or device components, or fail to do so at acceptable quality levels or prices.
Among some of the other changes introduced by the Leahy-Smith Act are changes that limit where a patentee may file a patent infringement suit and new procedures providing opportunities for third parties to challenge any issued patent in the USPTO.
Among some of the other changes introduced by the Leahy-Smith Act are changes that limit where a patentee may file a patent infringement suit and new post-grant review procedures providing opportunities for third parties to challenge any issued patent in the USPTO.
We do not currently have, nor do we currently plan to develop, the infrastructure or capability internally to manufacture our clinical supplies for use in the conduct of our clinical trials, and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale.
We do not currently have, nor do we currently plan to develop, the infrastructure or capability internally to manufacture our clinical supplies for use in the conduct of our clinical trials, and we lack the resources and the capability to manufacture any of our product candidates, devices, or device components on a clinical or commercial scale.
A network or data security incident may allow unauthorized access to our network or data, which could result in a material disruption of our clinical trials, harm our reputation, harm our business, create additional liability and adversely impact our financial results or operational results.
A data breach, security incident, or other unauthorized network intrusion or access may allow unauthorized access to our network or data, which could result in a material disruption of our clinical trials, harm our reputation, harm our business, create additional liability and adversely impact our financial results or operational results.
In the United States, there have been and continues to be a number of legislative initiatives to contain healthcare costs. For example, in March 2010, the Affordable Care Act was passed, which was intended to substantially change the way healthcare is financed by both governmental and private insurers, and significantly impact the U.S. pharmaceutical industry.
In the United States, there have been and continues to be a number of legislative initiatives to contain healthcare costs. For example, in March 2010, the ACA was passed, which was intended to substantially change the way healthcare is financed by both governmental and private insurers, and significantly impact the U.S. pharmaceutical industry.
In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring our product candidates to market.
In addition, the uncertainties associated with litigation or post-grant review proceedings could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring our product candidates to market.
See “Business—Coverage and Reimbursement.” Outside the United States, international operations are generally subject to extensive governmental price controls and other price-restrictive regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries has and will continue to put pressure on the pricing and usage of products.
See “Business—Coverage and Reimbursement.” Outside the U.S., international operations are generally subject to extensive governmental price controls and other price-restrictive regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries has and will continue to put pressure on the pricing and usage of products.
We also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as rules implemented by the SEC and The Nasdaq Stock Market LLC (“Nasdaq”). These rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.
We also incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as well as rules implemented by the SEC and The Nasdaq Stock Market LLC (“Nasdaq”). These rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.
See “Business—Government Regulation and Product Approvals—Expedited Development and Review Programs.” Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the marketed product.
See “Business—Government Regulation—Expedited Development and Review Programs” and “Business—Government Regulation—Regulation in the European Union.” Any regulatory approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the marketed product.
Our goal is to build a sustainable portfolio of investigational monoclonal antibody therapies. We currently have a limited number of product candidates. There can be no assurance that the data that we may or may not develop for our product candidates in our planned indications will be sufficiently supportive to obtain regulatory approval.
Our goal is to build a sustainable portfolio of protein and antibody therapies. We currently have a limited number of product candidates. There can be no assurance that the data that we may or may not develop for our product candidates in our planned indications will be sufficiently supportive to obtain regulatory approval.
Moreover, the capital markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies, including volatility resulting from the COVID-19 pandemic and general global macroeconomic conditions. These broad market fluctuations may also adversely affect the trading price of our common stock.
Moreover, the capital markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies, including volatility resulting from general global macroeconomic conditions. These broad market fluctuations may also adversely affect the trading price of our common stock.
Accordingly, in markets outside the United States, the potential revenue may be insufficient to generate commercially reasonable revenue and profits. We expect to experience pricing pressures in connection with products due to the increasing trend toward managed healthcare, including the increasing influence of health maintenance organizations and additional legislative changes.
Accordingly, in markets outside the U.S., the potential revenue may be insufficient to generate commercially reasonable revenue and profits. We expect to experience pricing pressures in connection with products due to the increasing trend toward managed healthcare, including the increasing influence of health maintenance organizations and additional legislative changes.
We believe that any of the product candidates we develop that is approved in the United States as a biological product under a BLA should qualify for the 12-year period of exclusivity.
We believe that any of the product candidates we develop that is approved in the United States as a biological product under a BLA should qualify for the current 12-year period of exclusivity provided law.
Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to either: (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our patents or patent applications.
Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to either: (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our patents or patent applications until these filings are no longer confidential.
In addition, techniques used to obtain unauthorized access to networks in which data is stored or through which data is transmitted change frequently and generally are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques or implement adequate preventative measures to prevent an electronic intrusion.
In addition, techniques used to obtain unauthorized access to networks in which data is stored or through which data is transmitted change frequently and generally 65 are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques or implement adequate preventative measures to prevent such an event.
We currently have rights to the intellectual property, through licenses from third parties and under patents that we do not own, to develop and commercialize our product candidates.
We currently have rights to certain intellectual property, through licenses from third parties and under technology and patents that we do not own, to develop and commercialize our product candidates.
While these choice of forum provisions do not apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction, the choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against our and our directors, officers, and other employees.
While these choice of forum provisions do not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction, the choice of forum provision may limit a 67 stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against our and our directors, officers, and other employees.
Our Bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, any action asserting a claim against us arising pursuant to any provisions of the Delaware General Corporation Law, our certificate of incorporation or our bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine.
Our Bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, any action asserting a claim against us arising pursuant to any provisions of the Delaware General Corporation Law, our certificate of incorporation or our Bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine.
Our ability to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to: • completing research and development of our product candidates; • obtaining regulatory and marketing approvals for our product candidates; • manufacturing product candidates and establishing and maintaining supply and manufacturing relationships with third parties that are commercially feasible, meet regulatory requirements and our supply needs in sufficient quantities to meet market demand for our product candidates, if approved; • marketing, launching, and commercializing product candidates for which we obtain regulatory and marketing approval, either directly or with a collaborator or distributor; • gaining market acceptance of our product candidates as treatment options; • addressing any competing products; • protecting and enforcing our intellectual property rights, including patents, trade secrets, and know-how; 31 • negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter; • obtaining coverage and adequate reimbursement from third-party payors and maintaining pricing for our product candidates that supports profitability; and • attracting, hiring, and retaining qualified personnel.
Our ability to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to: • completing research and development of our product candidates; • obtaining regulatory and marketing approvals for our product candidates; • manufacturing product candidates and establishing and maintaining supply and manufacturing relationships with third parties that are commercially feasible, meet regulatory requirements and our supply needs in sufficient quantities to meet market demand for our product candidates, if approved; • marketing, launching, and commercializing product candidates for which we obtain regulatory and marketing approval, either directly or with a collaborator or distributor; • gaining market acceptance of our product candidates as treatment options; • addressing any competing products; • protecting and enforcing our intellectual property rights, including patents, trade secrets, and know-how; • negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter; • obtaining coverage and adequate reimbursement from third-party payors and maintaining pricing for our product candidates that supports profitability; and • attracting, hiring, and retaining qualified personnel. 39 Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate.
Risks Related to Our Financial Condition and Capital Requirements We will need to raise additional capital, and if we are unable to do so when needed, we will not be able to continue as a going concern. As of December 31, 2022, we had $424.6 million of cash, cash equivalents, and short-term investments.
Risks Related to Our Financial Condition and Capital Requirements We will need to raise additional capital, and if we are unable to do so when needed, we will not be able to continue as a going concern. As of December 31, 2023, we had $477.4 million of cash, cash equivalents, and short-term investments.
In response, the FDA has indicated that further review of the application is suspended pending receipt of additional information. There is no guarantee that upon submission of this additional data information the FDA will grant us Orphan drug designation.
In response, the FDA has indicated that further review of the application is suspended pending receipt of additional information. We are currently reviewing our submission further. There is no guarantee that upon submission of this additional data information the FDA will grant us Orphan drug designation.
More recently, on August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA”), which, among other provisions, included several measures intended to lower the cost of prescription drugs and related healthcare reforms.
More recently, on August 16, 2022, President Biden signed into law the IRA, which, among other provisions, included several measures intended to lower the cost of prescription drugs and related healthcare reforms.
They additionally may result in a delay of regulatory approval by the FDA or comparable foreign authorities, or, even in the instance that an affected product candidate is approved, may result in a restrictive drug label.
Such side effects additionally may result in a delay of regulatory approval by the FDA, EMA, or comparable foreign authorities, or, even in the instance that an affected product candidate is approved, may result in a restrictive drug label.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Third Amendment makes certain modifications to the Original Lease, including (i) the addition of 5,240 square feet of office space in the same building (the “July 2022 Expansion Premises”), (ii) the termination of the 1,087 square feet of leased space under the Original Lease, and (iii) the extension of the expiration date of the 3,284 square feet of leased space under the First Amendment to four years from the delivery of the July 2022 Expansion Premises.
Biggest changeThe Third Amendment makes certain modifications to the Original Lease, including (i) the addition of 5,240 square feet of office space in the same building (the “July 2022 Expansion Premises”), (ii) the termination of the 1,087 square feet of leased space under the Original Lease, and (iii) the extension of the expiration date of the 3,284 square feet of leased space under the First Amendment to April 2027.
Additionally, we lease approximately 27,128 sq. ft. of office and laboratory space in Boulder, Colorado under a lease that expires in December 2024, subject to two three-year renewal options prior to the expiration, and that includes rent escalation clauses through the lease term. 58
Additionally, we lease approximately 27,128 sq. ft. of office and laboratory space in Boulder, Colorado under a lease that expires in December 2024, subject to two three-year renewal options prior to the expiration, and that includes rent escalation clauses through the lease term.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may be involved in legal proceedings in the ordinary course of business. We are currently not a party to any legal proceedings that we believe would have a material adverse effect on our business, financial condition, or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 59 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, we may be involved in legal proceedings in the ordinary course of business. We are currently not a party to any legal proceedings that we believe would have a material adverse effect on our business, financial condition, or results of operations. 71 ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 72 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on The Nasdaq Capital Market under the symbol “VRDN.” Holders As of March 3, 2023, we had 20 registered holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on The Nasdaq Capital Market under the symbol “VRDN.” Holders As of February 22, 2024, we had 31 registered holders of record of our common stock.
Subject to these limitations, any future determination as to the payment of cash dividends on our common stock will be at our board of directors’ discretion and will depend on our financial condition, operating results, capital requirements, and other factors that our board of directors considers to be relevant. Unregistered Sales of Equity Securities None. ITEM 6. RESERVED
Subject to these limitations, any future determination as to the payment of cash dividends on our common stock will be at our board of directors’ discretion and will depend on our financial condition, operating results, capital requirements, and other factors that our board of directors considers to be relevant. Unregistered Sales of Equity Securities None.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. RESERVED

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe $44.0 million increase in research and development expenses is primarily attributable to an increase of $8.9 million in clinical trial expenses related to our lead product candidates, VRDN-001 and VRDN-002; an increase of $8.7 million in costs associated with our preclinical programs; an increase of $7.8 million in personnel related costs, including share-based compensation, due to an increase in headcount; an increase of $7.6 million in milestone, license and option fees due to milestone and upfront payments to ImmunoGen and Paragon Therapeutics, Inc.; an increase of $6.5 million in chemistry, manufacturing and controls costs; and an increase of $2.4 million in consulting expenses.
Biggest changeThe $58.9 million increase in research and development expenses is primarily attributable to the following: • $20.4 million increase in clinical trial costs mainly due to expenses associated with our THRIVE and THRIVE-2 clinical trials; • $19.0 million increase in personnel related costs, including share-based compensation, due to an increase in headcount; • $8.0 million increase in milestone, license and option fees due to the $15.0 million upfront payment for development of SC delivery systems, issuance of the equivalent of $5.7 million in shares of our common stock for an exclusive license and collaboration agreement, and a $5.3 million upfront payment for an exclusive license agreement during the year ended December 31, 2023, offset by upfront payments of $4.7 million for certain agreed upon development activities and the $13.0 million milestone payments for clinical trial activities for VRDN-001 during the year ended December 31, 2022; • $5.1 million increase in professional service fees for consultants and contractors to support ongoing programs; and • $3.6 million increase in chemistry, manufacturing and controls costs for our ongoing and planned clinical trials, SC development costs for VRDN-001, as well as IND-enabling activities for VRDN-003.
Net cash provided by financing activities in 2022 was primarily driven by net proceeds of $313.8 million in net proceeds from the 2022 Public Offering and the September 2022 ATM Agreement, $4.6 million in net proceeds from the Hercules Loan and Security Agreement, as well as $2.8 million in proceeds from the exercise of stock options, $0.9 million in proceeds from the exercise of warrants and $0.2 million in proceeds from the issuance of common stock under our employee stock purchase plan.
Net cash provided by financing activities in 2022 was primarily driven by net proceeds of $313.8 million from the 2022 Public Offering and the September 2022 ATM Agreement, $4.6 million in net proceeds from the Hercules Loan and Security Agreement, as well as $2.8 million in proceeds from the exercise of stock options, $0.9 million in proceeds from the exercise of warrants and $0.2 million in proceeds from the issuance of common stock under our employee stock purchase plan. 81
Our business model is designed to identify and evaluate product opportunities in disease areas where trial data establishes proof-of-concept for a drug target in the clinic, but the competitive evolution of the product life cycle management and number of entrants appears incomplete.
Our business model is designed to identify and evaluate product opportunities in disease areas where trial data establishes proof-of-concept for a 73 drug target in the clinic, but the competitive evolution of the product life cycle management and number of entrants appears incomplete.
Under the Hercules Loan and Security Agreement, the Lenders provided us with access to a term loan with an aggregate principal amount of up to $75.0 million, in four tranches (collectively the “Term Loan”), consisting of: (1) an initial tranche of $25.0 million, available through June 15, 2023; (2) a second tranche of $10.0 million, subject to the achievement of certain regulatory milestones, available through June 15, 2023; (3) a third tranche of $15.0 million, subject to the achievement of certain regulatory milestones, available through March 15, 2024; and (4) a fourth tranche of $25.0 million, subject to approval by the Lenders’ investment committee(s), available through December 15, 2024.
Under the Hercules Loan and Security Agreement, the Lenders provided us with access to a term loan with an aggregate principal amount of up to $75.0 million, in four tranches (collectively the “Term Loan”), consisting of: (1) an initial tranche of $25.0 million, which was available through June 15, 2023; (2) a second tranche of $10.0 million, subject to the achievement of certain regulatory milestones, which was available through June 15, 2023; (3) a third tranche of $15.0 million, subject to the achievement of certain regulatory milestones, available through March 15, 2024; and (4) a fourth tranche of $25.0 million, subject to approval by the Lenders’ investment committee(s), available through December 15, 2024.
The royalty percentage may vary based on different tiers of annual net sales of the licensed products made. Zenas BioPharma is obligated to make royalty payments to us for the royalty term in the Zenas Agreements.
The royalty percentage may vary based on different tiers of annual net sales of the licensed 75 products made. Zenas BioPharma is obligated to make royalty payments to us for the royalty term in the Zenas Agreements.
Overview We are a biopharmaceutical company focused on discovering and developing potential best-in-class medicines for serious and rare diseases. We target under-competitive disease areas where marketed therapies often leave room for improvements in efficacy, safety, and/or dosing convenience.
Overview We are a biopharmaceutical company focused on discovering and developing potential best-in-class medicines for serious and rare diseases. We target disease areas where marketed therapies often leave room for improvements in efficacy, safety, and/or dosing convenience.
Our material cash requirements include obligations as of December 31, 2022, as well as resources required to fulfill our research and development activities and the effects that such obligations and activities are expected to have on our liquidity and cash flows in future periods.
Our material cash requirements include obligations as of December 31, 2023, as well as resources required to fulfill our research and development activities and the effects that such obligations and activities are expected to have on our liquidity and cash flows in future periods.
Underwritten Public Offerings In August 2022, we entered into an underwriting agreement (the “2022 Underwriting Agreement”) with Jefferies, SVB Securities LLC and Evercore Group LLC relating to the offer and sale (the “2022 Offering”) of 11,352,640 shares of our common stock, which includes 1,725,000 shares of common stock issued in connection with the exercise in full by the underwriters of their option to purchase additional shares at a public offering price of $23.50 per share, and 28,084 shares of the Company’s Series B Non-Voting Convertible Preferred Stock, at a public offering price of $1,566.745 per share (collectively, the “2022 Public Offering”).
Underwritten Public Offerings In August 2022, we entered into an underwriting agreement with Jefferies, Leerink Partners LLC and Evercore Group LLC relating to the offer and sale of 11,352,640 shares of our common stock, which includes 1,725,000 shares of common stock issued in connection with the exercise in full by the underwriters of their option to purchase additional shares at a public offering price of $23.50 per share, and 28,084 shares of the Company’s Series B Non-Voting Convertible Preferred Stock, at a public offering price of $1,566.745 per share (collectively, the “2022 Public Offering”).
As of December 31, 2022, 964,357 shares were sold under the September 2022 ATM Agreement at a weighted average price of $26.01 per share, for aggregate net proceeds of approximately $24.2 million, including commissions to Jefferies as a sales agent.
During the year ended December 31, 2022, 964,357 shares were sold under the September 2022 ATM Agreement at a weighted average price of $26.01 per share, for aggregate net proceeds of approximately $24.2 million, including commissions to Jefferies as a sales agent.
Research and Development Expenses Research and development expenses consist of costs incurred for the research and development of our therapeutic programs and product candidates, which include: • employee-related expenses, including salaries, severance, retention, benefits, insurance, and share-based compensation expense; • expenses incurred under agreements with clinical research organizations (“CROs”), investigative sites that conduct our clinical trials, and other clinical trial-related vendors, and consultants; • the costs of acquiring, developing, and manufacturing and testing clinical and preclinical materials, including costs incurred under agreements with contract manufacturing organizations (“CMOs”); • costs associated with non-clinical activities and regulatory operations; 61 • license fees and milestone payments related to the acquisition and retention of certain licensed technology and intellectual property rights; and • facilities, depreciation, market research, and other expenses, which include allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory supplies.
Research and Development Expenses Research and development expenses consist of costs incurred for the research and development of our therapeutic programs and product candidates, which include: • employee-related expenses, including salaries, severance, retention, benefits, insurance, and share-based compensation expense; • expenses incurred under agreements with CROs, investigative sites that conduct our clinical trials, and other clinical trial-related vendors, and consultants; • the costs of acquiring, developing, and manufacturing and testing clinical and preclinical materials, including costs incurred under agreements with CMOs; • costs associated with non-clinical activities and regulatory operations; • license fees and milestone payments related to the acquisition and retention of certain licensed technology and intellectual property rights; and • facilities, depreciation, market research, and other expenses, which include allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory supplies.
The Term Loan bears interest at a floating per annum rate equal to the greater of (1) 7.45% and (2) 4.2% above the Prime Rate, provided that the Term Loan interest rate shall not exceed a per annum rate of 8.95%. Interest is payable monthly in arrears on the first day of each month.
The Amended Term Loan bears interest at a floating per annum rate equal to the greater of (1) 7.45% and (2) 4.2% above the Prime Rate (as defined therein), provided that the Term Loan interest rate shall not exceed a per annum rate of 8.95%. Interest is payable monthly in arrears on the first day of each month.
Other income, net for the year ended December 31, 2022, is comprised of $4.9 million of interest income earned on short-term investments as well as sub-lease income, offset by $0.5 million in interest expense related to our Hercules 63 Loan and Security Agreement.
Other income, net for the year ended December 31, 2022 is comprised of $4.6 million of interest income earned on short-term investments as well as $0.3 million of sub-lease income, offset by $0.5 million in interest expense related to our Hercules Loan and Security Agreement.
Loan and Security Agreement with Hercules Capital, Inc. On April 1, 2022, we entered into a loan and security agreement (the “Hercules Loan and Security Agreement”) among the Company, certain of our subsidiaries from time to time party thereto (together with the Company, collectively, the “Borrower”), Hercules Capital, Inc. (“Hercules”) and certain other lenders party thereto (the “Lenders”).
Loan and Security Agreement with Hercules Capital, Inc. On April 1, 2022, we entered into the Hercules Loan and Security Agreement among the Company, certain of our subsidiaries from time to time party thereto (together with the Company, collectively, the “Borrower”), Hercules and certain other lenders party thereto (the “Lenders”).
We consider future economic benefits from acquired contractual rights to licensed technology to be uncertain until such a drug candidate is approved by the U.S. Food and Drug Administration (“FDA”) or when other significant risk factors are abated. We expect that our research and development expenses will increase as we expand our clinical development programs and initiate new clinical trials.
We consider future economic benefits from acquired contractual rights to licensed technology to be uncertain until such a drug candidate is approved by the FDA or when other significant risk factors are abated. We expect that our research and development expenses will increase as we expand our clinical development programs and initiate new clinical trials.
ATM Agreements In September 2022, we entered into an Open Market Sale Agreement SM (the “September 2022 ATM Agreement”) with Jefferies, LLC (“Jeffries”) pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $175.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as the sales agent.
ATM Agreements In September 2022, we entered into the September 2022 ATM Agreement with Jefferies LLC (“Jefferies”) pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $175.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as the sales agent.
We expect our research and development expenses to increase as we work to progress our clinical and preclinical programs. General and Administrative Expenses General and administrative expenses were $35.2 million during the year ended December 31, 2022, compared to $25.8 million during the year ended December 31, 2021.
We expect our research and development expenses to continue to increase as we work to progress our clinical and preclinical programs. General and Administrative Expenses General and administrative expenses were $95.0 million during the year ended December 31, 2023, compared to $35.2 million during the year ended December 31, 2022.
In addition, we are required to pay an end-of-term fee equal to 6% of the principal amount of funded Term Loan Advances at maturity, which are being accreted as additional interest expense over the term of the loan.
In addition, we were required to pay an end-of-term fee equal to 6% of the principal amount of funded Term Loan Advances (as defined in the Hercules Loan and Security Agreement) at maturity, which were being accreted as additional interest expense over the term of the loan.
Zenas BioPharma announced that it had obtained IND approval in China in July 2022. Under the license agreement, we received a $1.0 million milestone payment from Zenas BioPharma. Additionally, we are eligible to receive royalty payments based on a percentage of the annual net sales of any licensed products sold on a country-by-country basis in the greater area of China.
Zenas BioPharma announced that it had obtained IND approval in China in July 2022. Additionally, we are eligible to receive royalty payments based on a percentage of the annual net sales of any licensed products sold on a country-by-country basis in the greater area of China.
If additional development milestones are met, the interest-only period will be extended to April 1, 2025 pursuant to a second extension. We are required to repay the Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026.
If additional development milestones are met, the interest-only period will be further extended to April 1, 2026. The Borrower is required to repay the Amended Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026.
Investing Activities Net cash used in investing activities was $115.1 million during the year ended December 31, 2022. Net cash used in investing activities in 2022 primarily consisted of net purchases of investments of $114.3 million and property and equipment purchases of $0.8 million. Net cash used in investing activities was $74.3 million during the year ended December 31, 2021.
Investing Activities Net cash used in investing activities was $94.3 million during the year ended December 31, 2023. Net cash used in investing activities in 2023 primarily consisted of net purchases of investments of $93.4 million and property and equipment purchases of $0.9 million. Net cash used in investing activities was $115.1 million during the year ended December 31, 2022.
Other Income, net Other income, net was $4.4 million during the year ended December 31, 2022 compared to $0.3 million during the year ended December 31, 2021.
Other Income, net Other income, net was $16.7 million during the year ended December 31, 2023 compared to $4.4 million during the year ended December 31, 2022.
Net cash provided by financing activities was $125.3 million for the year ended December 31, 2021.
Net cash provided by financing activities was $322.2 million for the year ended December 31, 2022.
We intend to prioritize indications where a fast-follower and a potentially differentiated drug candidate, or overall product profile, could create significant medical benefit for patients. We are engineering medicines to address unmet medical needs for patients and further advance drug innovation.
We intend to prioritize indications where a fast-follower and a potentially differentiated drug candidate, or overall product profile, could create significant medical benefit for patients. We are engineering medicines to address unmet medical needs for patients and further advance drug innovation. Our goal is to identify and evaluate product concepts leveraging clinically validated molecular targets using established therapeutic modalities.
Net cash used in investing activities in 2021 primarily consisted of net purchases of investments of $74.0 million and property and equipment purchases of $0.3 million. 66 Financing Activities Net cash provided by financing activities was $322.2 million for the year ended December 31, 2022.
Net cash used in investing activities in 2022 primarily consisted of net purchases of investments of $114.3 million and property and equipment purchases of $0.8 million. Financing Activities Net cash provided by financing activities was $225.7 million during the year ended December 31, 2023.
Our most advanced program, VRDN-001, is a differentiated humanized monoclonal antibody targeting IGF-1R intravenously administered for the treatment of TED. 60 Global Economic Considerations The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, increased U.S. trade tariffs and trade disputes with other countries, instability in the global capital and credit markets, supply chain weaknesses, and instability in the geopolitical environment, including as a result of the Russian invasion of Ukraine, the rising tensions between China and Taiwan and other political tensions, and lingering effects of the COVID-19 pandemic.
Global Economic Considerations The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, increased U.S. trade tariffs and trade disputes with other countries, instability in the global capital and credit markets, supply chain weaknesses, and instability in the geopolitical environment, including as a result of the Russian invasion of Ukraine, the rising tensions between China and Taiwan, the conflict in Israel and surrounding area and other political tensions.
General and Administrative Expenses General and administrative expenses consist primarily of salaries and related benefits, including share-based compensation, and severance and retention benefits related to our finance, accounting, human resources, legal, business development, and other support functions, professional fees for auditing, tax, and legal services, as well as insurance, board of director compensation, consulting, and other administrative expenses.
We will need to raise additional capital and may seek additional strategic alliances in the future in order to advance the various clinical trials that are part of our clinical development program described above. 76 General and Administrative Expenses General and administrative expenses consist primarily of salaries and related benefits, including share-based compensation, and severance and retention benefits related to our finance, accounting, human resources, legal, business development, and other support functions, professional fees for auditing, tax, and legal services, as well as insurance, board of director compensation, consulting, and other administrative expenses.
Since our inception and through December 31, 2022, we have generated an accumulated deficit of $488.2 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.
We believe that the accounting policy discussed below is critical to understanding our historical and future performance, as this policy relates to the more significant areas involving our judgments and estimates. 62 Clinical Trial and Preclinical Study Accruals We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on certain facts and circumstances at that time.
Clinical Trial and Preclinical Study Accruals We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on certain facts and circumstances at that time.
Summarized cash flows for the year ended December 31, 2022 and 2021 are as follows: Year Ended December 31, 2022 2021 (in thousands) Net cash provided by (used in): Operating activities $ (93,838) $ (54,581) Investing activities (115,126) (74,292) Financing activities 322,244 125,275 Total $ 113,280 $ (3,598) Operating Activities Net cash used in operating activities was $93.8 million for the year ended December 31, 2022, and primarily consisted of a net loss of $129.9 million, adjusted for non-cash items of $20.1 million (primarily share-based compensation of $19.8 million) and working capital adjustments of $16.0 million.
Net cash used in operating activities was $93.8 million for the year ended December 31, 2022, and primarily consisted of a net loss of $129.9 million, adjusted for non-cash items of $20.1 million, including share-based compensation of $19.8 million and working capital adjustments of $16.0 million.
Revenue for both periods was attributable to our collaboration agreement with Zenas BioPharma. The $1.2 million decrease in revenue is due to the timing of activities performed under the collaboration agreement. During the year ended December 31, 2022, the Company recognized $1.0 million upon Zenas BioPharma’s achievement of a certain development milestone.
Revenue for both periods was attributable to our collaboration agreement with Zenas BioPharma. The $1.5 million decrease in revenue is due to the timing of activities performed under the collaboration agreement.
Results of Operations Comparison of the Years Ended December 31, 2022 and 2021 Year Ended December 31, 2022 2021 Increase (Decrease) (in thousands) Revenue $ 1,772 $ 2,963 $ (1,191) Research and development expenses 100,894 56,886 44,008 General and administrative expenses 35,182 25,805 9,377 Other income (expense), net 4,430 315 4,115 Net loss $ (129,874) $ (79,413) $ (50,461) Revenue Revenue was $1.8 million for the year ended December 31, 2022, as compared to $3.0 million for the year ended December 31, 2021.
Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Year Ended December 31, 2023 2022 Increase (Decrease) (in thousands) Revenue $ 314 $ 1,772 $ (1,458) Research and development expenses 159,765 100,894 58,871 General and administrative expenses 94,999 35,182 59,817 Other income (expense), net 16,716 4,430 12,286 Net loss $ (237,734) $ (129,874) $ (107,860) Revenue Revenue was $0.3 million for the year ended December 31, 2023, as compared to $1.8 million for the year ended December 31, 2022.
Other income, net for the year ended December 31, 2021, is comprised of interest income earned on short-term investments as well as sub-lease income.
Other income, net for the year ended December 31, 2023 is comprised of $18.2 million of interest income earned on short-term investments as well as $0.3 million of sub-lease income, offset by $1.3 million in interest expense related to our Hercules Loan and Security Agreement, and $0.5 million in other losses.
As of December 31, 2022, we had $424.6 million in cash, cash equivalents, and short-term investments. We expect that our current resources will enable us to fund our planned operations into the second half of 2025. We have no products approved for commercial sale and have not generated any revenue from product sales.
As of December 31, 2023, we had $477.4 million in cash, cash equivalents, and short- 78 term investments. We expect that our current resources, including the gross proceeds of $186.3 million received in January 2024 from the sale of the Company’s common stock, will enable us to fund our planned operations into the second half of 2026.
Research and Development Expenses Research and development expenses were $100.9 million during the year ended December 31, 2022, compared to $56.9 million during the year ended December 31, 2021.
During the year ended December 31, 2022, we recognized $1.0 million upon Zenas BioPharma’s achievement of a certain development milestone. 77 Research and Development Expenses Research and development expenses were $159.8 million during the year ended December 31, 2023, compared to $100.9 million during the year ended December 31, 2022.
Per the terms of the Hercules Loan and Security Agreement, we were originally obligated to make interest-only payments through April 1, 2024. However, upon the achievement of a development milestone the interest-only 64 period was extended to October 1, 2024.
The milestone related to the third tranche was not achieved prior to amendment of the Hercules Loan and Security Agreement in August 2023. Upon signing we drew an initial principal amount of $5.0 million. Per the terms of the Hercules Loan and Security Agreement, we were originally obligated to make interest-only payments through April 1, 2024.
Net cash provided by financing activities in 2021 was primarily driven by net proceeds of $107.3 million from the sale of common stock in 2021 through the 2021 Public Offering and the April 2021 ATM Agreement, $15.7 million in net proceeds from the sale of our Series B Preferred Stock, $1.3 million from the exercise of common stock warrants, and $1.0 million in proceeds from employee stock option exercises.
Net cash provided by financing activities in 2023 was primarily driven by net proceeds of $189.5 million from the 2023 Private Placement and the September 2022 ATM Agreement, as well as $19.3 million in proceeds from the exercise of stock options, $14.5 million in net proceeds from the Hercules Amendment, $1.9 million in proceeds from the exercise of warrants and $0.6 million in proceeds from the issuance of common stock under our employee stock purchase plan.
An aggregate of 2,551,269 shares of common stock were sold pursuant to the April 2021 ATM Agreement prior to its termination, at a volume weighted-average price of $13.13 per share, for aggregate net proceeds of approximately $32.4 million, including commissions to Jefferies as sales agent.
During the quarter ended December 31, 2023, the Company sold 684,298 shares under the September 2022 ATM Agreement with Jefferies at a weighted average price of $22.30 per share, for aggregate net proceeds of approximately $14.8 million, including commissions to Jefferies as a sales agent.
The $9.4 million increase in general and administrative expenses is due primarily to an increase of $6.0 million in personnel costs, including share based compensation, due to an increase in headcount, as well as an increase of $3.1 million in consulting, professional and license fees.
The $59.8 million increase in general and administrative expenses is primarily attributable to the following: • $25.6 million increase in personnel costs, including share based compensation, due to an increase in headcount; • $31.0 million of severance costs primarily related to separation agreements with former executive officers, including $26.1 million of incremental share-based compensation related to the modification and acceleration of stock option vesting; and; • $7.9 million increase in professional and license fees due to market research, accounting and other professional fees to support the growing organization and prepare for commercial activities.
We are developing three product candidates, VRDN-001, VRDN-002 and VRDN-003, that are being developed for intravenous or subcutaneous administration to treat patients who suffer from thyroid eye disease (“TED”).
We believe that there are multiple opportunities to develop fast-follower therapeutics that improve on teprotumumab’s features, including dosing schedule, route of administration, and safety profile. We are developing two product candidates, VRDN-001 for intravenous and VRDN-003 for subcutaneous administration, to treat patients who suffer from TED.
Pursuant to the Purchase Agreement, we agreed to sell an aggregate of approximately 195,290 shares of Series A Preferred Stock for an aggregate purchase price of approximately $91.0 million. Each share of Series A Preferred Stock is convertible into 66.67 shares of our common stock, subject to specified conditions.
Each share of Series B Preferred Stock is convertible into 66.67 shares of our common stock, subject to certain beneficial ownership limitations.
Removed
For example, upon receipt of topline data from our planned proof of concept trial of VRDN-002 by the end of 2023, we expect to determine which of VRDN-002 or VRDN-003 to advance into a pivotal Phase 3 trial in the first half of 2024.
Added
This section discusses 2023 and 2022 items and year-to-year comparisons between the years ended December 31, 2023 and 2022.
Removed
We will need to raise additional capital and may seek additional strategic alliances in the future in order to advance the various clinical trials that are part of our clinical development program described above.
Added
Discussions of the year ended December 31, 2021 and year-to-year comparisons between the years ended December 31, 2022 and 2021 have been excluded from this Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 9, 2023.
Removed
The first tranche of $25.0 million will be available to us through June 15, 2023. Upon signing we drew an initial principal amount of $5.0 million.
Added
We prioritize product concepts that are aligned with clinical and commercial hypotheses, which we expect will provide an attractive balance of risk and opportunity, thereby representing a compelling allocation of our resources.
Removed
In November 2021, we entered into an Open Market Sale Agreement SM (the “November 2021 ATM Agreement”) with Jefferies, pursuant to which we could offer and sell shares of our common stock having an aggregate offering price of up to $75.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as sales agent.
Added
We focus on advancing therapeutic proteins, including antibodies, that we either in-license or discover internally, incorporating proprietary therapeutic protein and antibody discovery and optimization platforms to advance clinical candidates with unique characteristics.
Removed
The November 2021 ATM Agreement was terminated in connection with the September 2022 ATM Agreement. No shares were sold under the November 2021 ATM Agreement prior to its termination.
Added
We have built relevant expertise in protein and antibody discovery and engineering, biologics manufacturing, nonclinical and clinical development for TED, development of anti-neonatal Fc receptor therapies, and nonclinical and clinical development for indications in rare and autoimmune diseases.
Removed
In April 2021, we entered into an Open Market Sale Agreement SM (the “April 2021 ATM Agreement”) with Jefferies pursuant to which we could offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as sales agent.
Added
Our approach to rapidly discovering and developing novel therapeutics relies on our scientific expertise in evaluating pre-existing clinical proof-of-concept data for the drug targets we are pursuing, and opportunities to improve upon existing investigational and/or approved therapies.
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Jefferies received a commission equal to 3.0% of the gross sales proceeds of any common stock sold through Jefferies under the April 2021 ATM Agreement. The April 2021 ATM Agreement was terminated in connection with the November 2021 ATM Agreement.
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This approach informs how we design, select, and develop our product candidates, including in critical areas such as pharmacokinetics, pharmacodynamics, clinical trial design, trial endpoints, and the selection and recruitment of patients. We believe this strategy reduces the risks associated with discovering and developing novel therapeutics.
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In September 2021, we entered into an underwriting agreement (the “2021 Underwriting Agreement”) with Jeffries, SVB Leerink LLC and Evercore Group, LLC for the sale and issuance of 7,344,543 shares of common stock, which include 1,159,089 shares of common stock issued in connection with the exercise in full by the underwriters of their option to purchase additional shares at a public offering price of $11.00 per share, and 23,126 shares of Series B Non-Voting Convertible Preferred Stock at a public offering price of $733.37 per share (the “2021 Public Offering”).
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We have first prioritized the development of therapies for the treatment of TED, a serious and debilitating rare autoimmune disease that causes inflammation within the orbit of the eye that can cause bulging of the eyes, redness and swelling, double vision, pain, and potential blindness.
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Our aggregate gross proceeds from the 2021 Public Offering, including the exercise of the option, were approximately $97.7 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by us. Purchase Agreements In October 2020, we entered into a securities purchase agreement (the “Purchase Agreement”) with the purchasers named therein (the “Investors”).
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TED significantly impacts quality of life, imposing a high burden on activities of daily living and mental health for patients suffering from the disease. TED is a progressive disease consisting of an initial active phase, followed by a transition to a secondary chronic phase.
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The powers, preferences, rights, qualifications, limitations, and restrictions applicable to the Series A Preferred Stock are set forth in the applicable certificate of designations.
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The only medicine approved by the FDA for TED is Tepezza® (teprotumumab), which is an intravenously administered monoclonal antibody that targets IGF-1R. Tepezza® is marketed in the United States by Horizon, which was acquired by Amgen in October 2023.
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During the year ended December 31, 2021, 138,050 shares of Series A Preferred Stock were converted into 9,203,732 shares of common stock. 65 In December 2019, we entered into a common stock purchase agreement (the “Aspire Stock Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”), which provides that, subject to the terms, conditions, and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $20.0 million of shares of our common stock over the 30-month term of the Aspire Stock Purchase Agreement.
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The results from clinical trials of teprotumumab conducted by Horizon provide strong clinical validation linking the targeting of IGF-1R to clinical benefit in patients with TED. However, clinical trials evaluating teprotumumab in patients with TED reported to date used a single dosing regimen, providing little guidance as to the optimal dosing required for clinical activity in TED.
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Upon execution of the Aspire Stock Purchase Agreement, we sold to Aspire Capital 106,564 shares of common stock at $9.38 per share for proceeds of $1.0 million as the Initial Purchase Shares (as defined in the Aspire Stock Purchase Agreement).
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Our most advanced program, VRDN-001, is a differentiated humanized monoclonal antibody targeting IGF-1R intravenously administered for the treatment of TED. In previously presented in vitro preclinical data, we showed that VRDN-001 is a potentially differentiated full antagonist of IGF-1R, compared to teprotumumab’s incomplete antagonism of IGF-1R.
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During the year ended December 31, 2020, we sold to Aspire Capital 412,187 shares of our common stock at a weighted-average price of $21.35 per share for aggregate net proceeds of $8.8 million. As of December 31, 2022, we have the ability to sell an additional $10.2 million of shares of our common stock to Aspire Capital.
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We also conducted Phase 1/2 clinical trials of VRDN-001 in patients with active or chronic TED. In the active TED portion of the Phase 1/2 clinical trials, data reported from all three dose cohorts of VRDN-001 (n=21) showed significant and rapid improvement in both the signs and symptoms of TED after two infusions of VRDN-001 compared to placebo.
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Net cash used in operating activities was $54.6 million for the year ended December 31, 2021, and primarily consisted of a net loss of $79.4 million, adjusted for non-cash items of $23.1 million (primarily share-based compensation of $14.5 million and a $7.5 million non-cash charge related to the issuance of common stock as payment for licensing fees to Xencor, Inc.) and working capital adjustments of $1.7 million.
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Across all VRDN-001 treated patients in the active TED trial, 71% were proptosis responders, 67% were overall responders, 62% achieved a CAS of 0 or 1, and 54% had complete resolution of their diplopia.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company, as defined by Rule 12b-2 under the Exchange Act and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item. ITEM 8.
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In the chronic TED portion of the Phase 1/2 clinical trials, data reported from both dose cohorts of VRDN-001 (n=12) showed significant and rapid improvement in the signs and symptoms of TED after two infusions of VRDN-001 compared to placebo.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplemental data required by this item are set forth on the pages indicated in Part IV, Item 15(a)(1) of this Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
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Across all VRDN-001 treated patients in the chronic TED trial, 42% were proptosis responders, 40% achieved a CAS of 0 or 1, and no patients had complete resolution of their diplopia. In the Phase 1/2 clinical trials of both active and chronic TED, VRDN-001 had a favorable safety profile and was well-tolerated by all patients treated in all dose cohorts.
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We are evaluating VRDN-001 in two global Phase 3 clinical trials, THRIVE and THRIVE-2, for the treatment of active and chronic TED, respectively. THRIVE and THRIVE-2 are each designed to compare a five-dose IV treatment arm of VRDN-001 at 10 mg/kg, dosed three weeks apart, to placebo.
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This five-dose VRDN-001 regimen features fewer infusions and a shorter time per infusion compared to teprotumumab, the currently marketed IGF-1R inhibitor. We expect to report topline THRIVE and THRIVE-2 data in the middle of 2024 and by year end 2024, respectively.
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We expect that the THRIVE and THRIVE-2 Phase 3 trials, together with a safety database comprising 300 treated patients will support global health authority registration for marketing approval in both active and chronic TED, respectively. 74 In addition to our VRDN-001 IV program, in December 2023 we selected VRDN-003 as our prioritized subcutaneous program for pivotal development in TED following positive data in a Phase 1 clinical trial in healthy volunteers.
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We believe VRDN-003 has the potential to be the best-in-class subcutaneous anti-IGF-1R program by preserving the efficacy of anti-IGF-1Rs in TED, improving safety, and maximizing convenience for patients. VRDN-003 has the same binding domain as its parent molecule, VRDN-001, and was engineered to have a longer half-life. VRDN-003 is designed to be a low-volume, self-administered, infrequently-dosed subcutaneous IGF-1R for TED.
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The VRDN-003 Phase 1 clinical study showed VRDN-003 to have a prolonged half-life of 40 to 50 days, which is four to five times that of its parent molecule, VRDN-001.
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Because of the similarities between the VRDN-001 and VRDN-003 antibodies, we expect VRDN-003 to have similar clinical responses at the exposure levels of VRDN-001 that led to robust clinical activity in its Phase 2 clinical trial in TED.
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Further, pharmacokinetic modeling of VRDN-003 predicted that exposure levels of VRDN-003 could be achieved that are equivalent to exposure levels of VRDN-001 that produced clinically meaningful results with multiple dosing regimens of VRDN-003, i.e., subcutaneous injection every two, four, or eight weeks.
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Based on these results, we expect to initiate a global pivotal program with VRDN-003 in mid-2024, with planned trials in both active and chronic TED patients, pending regulatory authority alignment. In addition to developing therapies for TED, we are also developing a portfolio of engineered anti-FcRn inhibitors, including VRDN-006 and VRDN-008.

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