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What changed in Fulcrum Therapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Fulcrum Therapeutics, Inc.'s 2023 and 2024 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 2024 report.

+389 added−536 removedSource: 10-K (2024-12-31) vs 10-K (2024-02-27)

Top changes in Fulcrum Therapeutics, Inc.'s 2024 10-K

389 paragraphs added · 536 removed · 314 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

107 edited+25 added−138 removed329 unchanged
Biggest changeWhen considering an IND application for expanded access to an investigational product, the FDA will determine suitability when all of the following criteria apply: patient(s) have a serious or immediately life-threatening disease or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition; the potential patient benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context or condition to be treated; and the expanded use of the investigational drug for the requested treatment will not interfere with the initiation, conduct, or completion of clinical investigations that could support marketing approval of the product or otherwise compromise the potential development of the product.
Biggest changeFDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a case-by-case basis for: individual patients (single-patient IND applications for treatment in emergency settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the drug under a treatment protocol or Treatment IND Application. 16 When considering an IND application for expanded access to an investigational product, the FDA will determine suitability when all of the following criteria apply: patient(s) have a serious or immediately life-threatening disease or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition; the potential patient benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context or condition to be treated; and the expanded use of the investigational drug for the requested treatment will not interfere with the initiation, conduct, or completion of clinical investigations that could support marketing approval of the product or otherwise compromise the potential development of the product.
In August 2023, the FDA lifted the full clinical hold on the IND for pociredir for the potential treatment of SCD of full clinical hold.
In August 2023, the FDA lifted the full clinical hold on the IND for pociredir for the potential treatment of SCD.
There is no obligation for a sponsor to make its drug products available for expanded access; however, sponsor must make its expanded access policy publicly available upon the earlier of initiation of a Phase 2 or Phase 3 clinical trial; or 15 days after the drug or biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.
There is no obligation for a sponsor to make its drug products available for expanded access; however, a sponsor must make its expanded access policy publicly available upon the earlier of initiation of a Phase 2 or Phase 3 clinical trial; or 15 days after the drug or biologic receives designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.
Under the statute, a generic drug is bioequivalent to a RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.” Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Depending on state laws, generic drugs that are found to be therapeutically equivalent may be automatically substituted for prescriptions for the RLD by the dispensing pharmacist, without the intervention of the prescriber.
Under the statute, a generic drug is bioequivalent to a RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.” Upon approval of an ANDA, the FDA indicates whether the 21 generic product is “therapeutically equivalent” to the RLD in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Depending on state laws, generic drugs that are found to be therapeutically equivalent may be automatically substituted for prescriptions for the RLD by the dispensing pharmacist, without the intervention of the prescriber.
We are the FULcrew united around these Pillars: • We take great pride in being Purposeful Patient Partners • We have a culture of Trust and Transparency • We are Invested in our People • We have a Playful spirit and have fun together at work • We launched Fulcrum with a Bold Scientific Vision and remain committed to this journey Our Management of Human Capital To effectively leverage and manage our peoples, we ensure our hiring needs are directly aligned with our strategy, we invest in our people focused on their development and journey while at Fulcrum and most importantly we identify our key talent to ensure we are focused on their retention.
We are the FULcrew united around these Pillars: • We take great pride in being Purposeful Patient Partners • We have a culture of Trust and Transparency 32 • We are Invested in our People • We have a Playful spirit and have fun together at work • We launched Fulcrum with a Bold Scientific Vision and remain committed to this journey Our Management of Human Capital To effectively leverage and manage our peoples, we ensure our hiring needs are directly aligned with our strategy, we invest in our people focused on their development and journey while at Fulcrum and most importantly we identify our key talent to ensure we are focused on their retention.
A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; • the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government.
A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; 23 • the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government.
Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines), and products with a new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions, and viral diseases.
Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including 27 for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines), and products with a new active substance indicated for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and other immune dysfunctions, and viral diseases.
Pociredir showed a significant elevation of HbF over baseline in each of these 14 donor cell lines. We have conducted additional preclinical profiling in CD34+ derived cells and observed that treatment with pociredir increased HbF levels to approximately 30% of total hemoglobin, as measured by mass spectrometry, high performance liquid chromatography, and fast protein liquid chromatography techniques.
Pociredir showed a significant elevation of HbF over baseline in each of these 14 donor cell lines. We have conducted additional preclinical profiling in CD34+ derived cells and observed that treatment with pociredir increased HbF levels to approximately 30% of total hemoglobin, as measured by mass spectrometry, high performance liquid 8 chromatography, and fast protein liquid chromatography techniques.
Other potential consequences may include: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences may include: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; 20 • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
To date, we have achieved a $2.5 million specified preclinical milestone. MyoKardia will also pay us tiered royalties ranging from a mid single-digit percentage to a low double-digit percentage based on MyoKardia’s, and any of its affiliates’ and sublicensees’, annual worldwide net sales of products under the agreement directed against any Identified Target.
To date, we have achieved a $2.5 million specified preclinical milestone. MyoKardia will also pay us tiered royalties ranging from a mid single-digit percentage to a low double-digit percentage based on MyoKardia’s, and any 10 of its affiliates’ and sublicensees’, annual worldwide net sales of products under the agreement directed against any Identified Target.
In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.
In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the 26 ultimate demand for our products, once approved, or put pressure on our product pricing.
Corporate Information Our principal executive office is located at 26 Landsdowne Street, Cambridge, MA 02139, and our telephone number is 617-651-8851. Our internet website address is www.fulcrumtx.com. The information contained on, or that can be accessed through, our website is not a part of this Annual Report on Form 10-K.
Corporate Information Our principal executive office is located at 26 Landsdowne Street, Cambridge, MA 02139, and our telephone number is 617-651-8851. Our internet website address is www.fulcrumtx.com. The information contained on, or that can be accessed through, our website is not a part of this Annual Report on Form 10-K. 33
The California Privacy Rights Act, or CPRA, which became effective on January 1, 2023, imposes additional obligations on companies covered by the legislation and significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information, and establishes a state agency vested with the authority to enforce the CCPA.
The California Privacy Rights Act, or CPRA, which became effective on January 1, 2023, imposes additional obligations on companies covered by the legislation and significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain 24 sensitive personal information, and establishes a state agency vested with the authority to enforce the CCPA.
Other reasons for suspension or termination may be made by us based on factors such as evolving business objectives and/or the competitive environment. Information about clinical trials must be submitted within specific timeframes to the NIH for public dissemination on its ClinicalTrials.gov website.
Other reasons for suspension or termination may be made by us based on factors such as evolving business objectives and/or the competitive environment. Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on its ClinicalTrials.gov website.
We also own three U.S. non-provisional applications and related patent applications pending in Europe directed to solid forms and methods of using pociredir and one pending PCT application directed to pociredir methods of use and formulations, that, if resulting in issued patents, would be expected to expire between 2042 and 2043.
We also own three U.S. non-provisional applications and related patent applications pending in Europe directed to solid forms and methods of using pociredir and one pending U.S. non-provisional application directed to pociredir methods of use and formulations, that, if resulting in issued patents, would be expected to expire between 2042 and 2043.
The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin. This waiting period is designed to allow the FDA to review the IND to determine, among other things, whether human research subjects will be exposed to unreasonable health risks.
The FDA 15 requires a 30-day waiting period after the filing of each IND before clinical trials may begin. This waiting period is designed to allow the FDA to review the IND to determine, among other things, whether human research subjects will be exposed to unreasonable health risks.
The failure of an applicant to comply with the applicable regulatory requirements at any time during the product development process, including non-clinical testing, clinical testing, the approval process or post-approval process, may result in delays to the conduct of a study, regulatory review and approval and/or administrative or judicial sanctions.
The failure of an applicant to comply with the applicable regulatory requirements at any time during the product development process, including non-clinical testing, clinical testing, the approval 14 process or post-approval process, may result in delays to the conduct of a study, regulatory review and approval and/or administrative or judicial sanctions.
Clinical Trial Approval In April 2014, the EU adopted the new Clinical Trials Regulation, (EU) No 536/2014, which replaced the Clinical Trials Directive 2001/20/EC on January 31, 2022. The Clinical Trials Regulation is directly applicable in all EU Member States meaning no national implementing legislation in each EU Member State is required.
Clinical Trial Approval In April 2014, the EU adopted the Clinical Trials Regulation, (EU) No 536/2014, which replaced the Clinical Trials Directive 2001/20/EC on January 31, 2022. The Clinical Trials Regulation is directly applicable in all EU Member States meaning no national implementing legislation in each EU Member State is required.
The Priority Medicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation where the marketing authorization application will be made through the centralized procedure.
The Priority Medicines, or PRIME, scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation where the marketing authorization application, or MAA, will be made through the centralized procedure.
SCD is reported to shorten life expectancy by approximately 20 to 30 years. People with SCD are primarily treated by hematologists. In the United States, where newborn screening for SCD is mandatory, the estimated prevalence is approximately 100,000 individuals. In Europe, the estimated prevalence is approximately 50,000 individuals.
SCD is reported to shorten life expectancy by approximately 20 to 30 years. People with SCD are primarily treated by hematologists. 2 In the United States, where newborn screening for SCD is mandatory, the estimated prevalence is approximately 100,000 individuals. In Europe, the estimated prevalence is approximately 50,000 individuals.
If an applicant obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized procedure by the European Commission, and the study results for the population are included in the product information, even when negative, the medicine is then eligible for an additional six-month period of qualifying patent protection through extension of the term of the Supplementary Protection Certificate or SPC, provided an application for such extension is made at the same time as filing the SPC application for the product, or at any point up to two years before the SPC expires, even where the trial results are negative.
If an applicant obtains a marketing authorization in all EU Member States, or a marketing authorization granted in the centralized procedure by the European Commission, and the study results for the population are included in the product information, even when negative, the medicine is then eligible for an additional six-month period of qualifying patent protection through extension of the term of the Supplementary Protection Certificate or SPC, provided an application for such extension is made at the same time as filing the SPC application for the product, or at any point up to two years before the SPC expires.
We also seek to explore opportunities to acquire or in-license complementary technologies or therapies, such as our recent exclusive global license agreement with CAMP4 Therapeutics Corp., or CAMP4. • Maximize the commercial potential of our product candidates.
We also seek to explore opportunities to acquire or in-license complementary technologies or therapies, such as our exclusive global license agreement with CAMP4 Therapeutics Corp., or CAMP4. • Maximize the commercial potential of our product candidates.
In people with SCD, hemoglobin is composed of two mutant ß-subunits and two α-subunits and the result is the formation of HbS. The result of the mutation is less efficient oxygen transport and the formation of RBCs that have a sickle shape.
In people with SCD, hemoglobin is composed of two mutant ß-subunits and two α-subunits and the result is the formation of sickle hemoglobin, or HbS. The result of the mutation is less efficient oxygen transport and the formation of RBCs that have a sickle shape.
The PDCO may also grant waivers when development of a medicine for children is not needed or is not appropriate, such as for diseases that only affect the elderly population.
The PDCO may also grant waivers when 29 development of a medicine for children is not needed or is not appropriate, such as for diseases that only affect the elderly population.
A single UK-wide marketing authorization will be granted by the MHRA for all medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK.
A single UK-wide marketing authorization will be granted by the MHRA for all novel medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK.
Crizanlizumab, a fully-human monoclonal antibody p-selectin inhibitor marketed by Novartis, is approved for the reduction in the frequency of VOCs. L-glutamine, brand name ENDARI, marketed by Emmaus Life Sciences, Inc., is approved to reduce acute complications of the disorder. Lovo-cel and exa-cel are gene therapies approved for the treatment of severe SCD.
Crizanlizumab, a fully-human monoclonal antibody p-selectin inhibitor marketed by Novartis as ADAKVEO, is approved for the reduction in the frequency of VOCs. L-glutamine, brand name ENDARI, marketed by Emmaus Life Sciences, Inc., is approved to reduce acute complications of the disorder. Lovo-cel and exa-cel are gene therapies approved for the treatment of severe SCD.
License Agreement with CAMP4 In July 2023, we entered into a license agreement with CAMP4 pursuant to which we received a worldwide exclusive license (including the right to sublicense) from CAMP4 to rights under its Diamond Blackfan Anemia, or DBA program, which includes certain small molecule compounds, composition of matter and method of use patent rights, and know-how for us to research, develop, manufacture, use, commercialize or otherwise exploit therapeutic products in any indication, including the grant of a sublicense under certain intellectual property rights that CAMP4 has licensed under an agreement with Children’s Medical Center Corporation, or CMCC.
License Agreement with CAMP4 In July 2023, we entered into a license agreement with CAMP4 pursuant to which we received a worldwide exclusive license (including the right to sublicense) from CAMP4 to rights under its DBA program, which includes certain small molecule compounds, composition of matter and method of use patent rights, and know-how for us to research, develop, manufacture, use, commercialize or otherwise exploit therapeutic products in any indication, including the grant of a sublicense under certain intellectual property rights that CAMP4 has licensed under an agreement with Children’s Medical Center Corporation, or CMCC.
Based on a large body of genetic, clinical, and observational evidence showing the effects of higher levels of HbF in people with SCD, for a given patient, even small increases in total HbF are expected to be associated with clinical benefit, with levels in the upper 20% to lower 30%-range being associated with significant reductions in the manifestations of SCD.
Based on a large body of genetic, clinical, and observational evidence showing the effects of higher levels of HbF in people with SCD, for a given patient, even small increases in total HbF are associated with clinical benefit, with levels in the upper 20% to lower 30%-range being associated with significant reductions in the manifestations of SCD.
Collaboration and License Agreement with MyoKardia, a wholly-owned subsidiary of Bristol-Myers Squibb Company In July 2020, we entered into a collaboration and license agreement with MyoKardia to identify biological targets that are capable of modulating genes of interest with relevance to certain genetically defined cardiomyopathies.
License Agreements and Collaborations Collaboration and License Agreement with MyoKardia, a wholly-owned subsidiary of Bristol-Myers Squibb Company In July 2020, we entered into a collaboration and license agreement with MyoKardia to identify biological targets that are capable of modulating genes of interest with relevance to certain genetically defined cardiomyopathies.
However, notwithstanding that there is no wholesale recognition of EU pharmaceutical legislation under the TCA, under a new international recognition procedure that was put in place by the Medicines and Healthcare products Regulatory Agency, or MHRA, on January 1, 2024, the MHRA may take into account decisions on the approval of a marketing authorization from the EMA (and certain other regulators) when considering an application for a Great Britain marketing authorization.
However, notwithstanding that there is no wholesale recognition of EU pharmaceutical legislation under the TCA, under a new international recognition procedure that was put in place by the Medicines and Healthcare products Regulatory Agency, or MHRA, on January 1, 2024, the MHRA may take into account decisions on the approval of a marketing authorization from the EMA (and certain other regulators) when considering an application for a UK marketing authorization.
In the case of orphan medicinal products, a two year extension of the orphan market exclusivity may be available. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.
The incentive in the case of orphan medicinal products is that a two year extension of the orphan market exclusivity may be available. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.
We have developed a discovery approach that we employ to systematically identify and validate cellular drug targets that can potentially modulate gene expression to treat known root causes of genetically defined rare diseases, with a focus on muscle and hematology diseases.
We have developed a discovery approach that we employ to systematically identify and validate cellular drug targets that can potentially modulate gene expression to treat known root causes of genetically defined rare diseases, with a primary focus on hematology diseases.
Washington state’s My Health My Data Act, which comes into force on March 31, 2024, expands the definition of consumer health data, affords consumers with privacy rights and creates a private right of action, which could generate litigation.
Washington state’s My Health My Data Act, which entered into force on March 31, 2024, expands the definition of consumer health data, affords consumers with privacy rights and creates a private right of action, which could generate litigation.
Among the provisions of the ACA of importance to our potential product candidates are: • an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; • expansion of eligibility criteria for Medicaid programs, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program; • expanded the types of entities eligible for the 340B drug discount program; • established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 70% point-of-sale-discount off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D; and • a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
Among the provisions of the ACA of importance to our potential product candidates are: • an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs; • expansion of eligibility criteria for Medicaid programs, thereby potentially increasing a manufacturer’s Medicaid rebate liability; • expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program; • expanded the types of entities eligible for the 340B drug discount program; • established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 70% point-of-sale-discount off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D (later replaced effective January 1, 2025 with the Medicare Part D Manufacturer Discount Program); and • a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
Regulatory Requirements After a Marketing Authorization has been Obtained In case an authorization for a medicinal product in the EU is obtained, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products.
Regulatory Requirements After a Marketing Authorization has been Obtained If an authorization for a medicinal product in the EU is obtained, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products.
License Agreements and Collaborations Right of Reference and License Agreement with GlaxoSmithKline In February 2019, we entered into a right of reference and license agreement with affiliates of GSK, as amended in September 2020, pursuant to which GSK granted us a right of reference to certain INDs filed with the FDA and controlled by GSK or its affiliates relating to losmapimod and an exclusive worldwide license under certain patent rights related to losmapimod.
In February 2019, we entered into a right of reference and license agreement with affiliates of GSK, as amended in September 2020, pursuant to which GSK granted us a right of reference to certain INDs filed with the FDA and controlled by GSK or its affiliates relating to losmapimod and an exclusive worldwide license under certain patent rights related to losmapimod.
Pociredir Currently, our patent portfolio related to pociredir includes two issued U.S. patents directed to composition of matter that is expected to expire in 2040, one U.S. non-provisional application and related pending patent applications in Canada and Mexico, Europe, Africa, Australia and New Zealand, South America, and Asia that, if issued, are expected to expire between 2039 and 2040.
Pociredir Currently, our patent portfolio related to pociredir includes three issued U.S. patents directed to composition of matter that is expected to expire in 2040, one U.S. non-provisional application and related granted patents and pending patent applications in Canada and Mexico, Europe, Africa, Australia and New Zealand, South America, and Asia that, if issued, are expected to expire between 2039 and 2040.
Following the clinical hold, we amended the protocol to revise the inclusion and exclusion criteria for the Phase 1b clinical trial to target patients with higher disease severity.
Following the clinical hold, we amended the protocol to revise the inclusion and exclusion criteria for the Phase 1b clinical trial to target subjects with higher disease severity.
Once subsequently definitively renewed, the marketing authorization shall be valid for an unlimited period, unless the European Commission or the national competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal period.
Once subsequently definitively renewed, the marketing authorization shall be valid for an unlimited period, unless the European Commission or the national competent authority decides, on justified grounds relating to pharmacovigilance, to require one additional five-year renewal period.
There have been 23 TEAEs reported as of the data cutoff date, eight of which were reported as possibly related to study drug (headache, lip numbness, diarrhea, fatigue, somnolence, nausea or tinnitus), none of which were severe and were deemed non-serious. There have been no discontinuations due to TEAEs as of the data cutoff date.
There have been 23 treatment emergent adverse events, or TEAEs, reported as of the data cutoff date, eight of which were reported as possibly related to study drug (headache, lip numbness, diarrhea, fatigue, somnolence, nausea or tinnitus), none of which were severe and were deemed non-serious. There have been no discontinuations due to TEAEs as of the data cutoff date.
Except in respect of the new EU Clinical Trials Regulation, the regulatory regime in Great Britain therefore currently largely aligns with EU regulations, however it is possible that these regimes will diverge more significantly in future now that Great Britain’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.
Except in respect of the EU Clinical Trials Regulation, the regulatory regime in the UK therefore currently largely aligns with EU regulations, however it is possible that these regimes will diverge more significantly in future now that the UK’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.
As of February 20, 2024, we owned or in-licensed eight U.S. patents, nine U.S. pending non-provisional patent applications and related pending foreign patent applications, and one pending U.S. provisional patent application. The intellectual property portfolio for our most advanced programs as of February 20, 2024, is summarized below.
As of February 18, 2025, we owned or in-licensed eight U.S. patents, nine U.S. pending non-provisional patent applications and related pending foreign patent applications, and one pending U.S. provisional patent application. The intellectual property portfolio for our most advanced programs as of February 18, 2025, is summarized below.
Our Commitment to Diversity, Equity & Inclusion We strongly believe in a diverse workplace where all our employees can thrive in an inclusive environment free from discrimination, harassment, bias and prejudice. We aim to treat all individuals with respect and dignity and to provide all our employees with equal opportunity and fair treatment based on merit.
We strongly believe in a workplace where all our employees can thrive in an inclusive environment free from discrimination, harassment, bias and prejudice. We aim to treat all individuals with respect and dignity and to provide all our employees with equal opportunity and fair treatment based on merit.
In addition to product candidate development, we have developed a drug discovery approach that we employ to systematically identify and validate cellular drug targets that can potentially modulate gene expression to treat known root causes of genetically defined rare diseases.
In addition to our product candidates, we developed a discovery approach that we employ to systematically identify and validate cellular drug targets that can potentially modulate gene expression to treat known root causes of genetically defined rare diseases.
We believe these initial data showing that pociredir increases HbF levels by up to ~10.0% from baseline after as few as six weeks of therapy support its potential to become a transformative therapy for people living with SCD. Pociredir was generally well-tolerated as of the March 3, 2023 data cutoff date.
We believe the initial data showing that pociredir increases HbF levels by up to ~10.0% from baseline after as few as six weeks of therapy support its potential to become a transformative therapy for people living with SCD. Pociredir was generally well-tolerated through the end of 2023.
Until being placed on clinical hold in February 2023, the Phase 1b trial was evaluating subjects both on and off background hydroxyurea therapy. Phase 1b data from subjects in the 6 mg dose cohort (n=10) showed up to 9.5% absolute HbF increases from baseline. These data suggested no difference in response in subjects on (n=3) and off (n=7) background hydroxyurea.
Until being placed on clinical hold in February 2023, the Phase 1b trial was evaluating subjects both on and off background hydroxyurea therapy. 4 Phase 1b data from subjects in the 6 mg dose cohort (n=10) showed up to 9.5% absolute HbF increases from baseline.
We expect to report topline data from REACH in the fourth quarter of 2024. In January 2023, we announced interim data from our Phase 1b clinical trial of pociredir in SCD. We completed enrollment in the 6 mg and 2 mg dose cohorts, and we do not plan to enroll additional subjects in these cohorts.
In January 2023, we announced interim data from our Phase 1b clinical trial of pociredir in SCD. We completed enrollment in the 6 mg and 2 mg dose cohorts, and do not plan to enroll additional subjects in these cohorts.
Data from subjects in the 12 mg dose cohort (n=3), prior to the suspension of the trial in February 2023, showed up to 10.0% absolute HbF increases from baseline, or total HbF of ~25.0%, after 42 days of treatment (the full three months of treatment was interrupted by the clinical hold). Subjects with asterisks were on background hydroxyurea.
Data from subjects in the 2 mg dose cohort (n=2), showed up to 4.6% absolute HbF increases from baseline. 6 Data from subjects in the 12 mg dose cohort (n=3), prior to the suspension of the trial in February 2023, showed up to 10.0% absolute HbF increases from baseline, or total HbF of ~25.0%, after 42 days of treatment (the full three months of treatment was interrupted by the clinical hold).
We seek to protect our proprietary information, in part, using confidentiality agreements with any collaborators, scientific advisors, employees and consultants and invention assignment agreements with our employees. We also have agreements requiring assignment of inventions with selected consultants, scientific advisors and collaborators. These agreements may not provide meaningful protection.
However, trade secrets and confidential know-how are difficult to protect. We seek to protect our proprietary information, in part, using confidentiality agreements with any collaborators, scientific advisors, employees and consultants and invention assignment agreements with our employees. We also have agreements requiring assignment of inventions with selected consultants, scientific advisors and collaborators. These agreements may not provide meaningful protection.
As of February 20, 2024, we had 76 full-time employees, including a total of 26 employees with M.D. or Ph.D. degrees. Of these full-time employees, 47 employees are engaged in research and development. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.
As of February 18, 2025, we had 45 full-time employees, including a total of 13 employees with M.D. or Ph.D. degrees. Of these full-time employees, 30 employees are engaged in research and development. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.
Our Strategy Through our focus on the development of small molecules, including our product candidates for the treatment of FSHD and SCD, our aim is to address unmet need in patients with genetically defined rare diseases that are debilitating and, in the case of SCD, life-threatening.
Our Strategy Through our focus on the development of small molecules, including our product candidate for the treatment of SCD, our aim is to address unmet need in patients with genetically defined rare diseases that are debilitating and, in the case of SCD, life-threatening. The key components of our strategy include: • Rapidly develop pociredir for the treatment of SCD.
We have obtained sufficient quantities of losmapimod from a contract manufacturing organization to complete our ongoing Phase 3 clinical trial in FSHD. We have obtained sufficient quantities of pociredir from a contract manufacturing organization to complete our Phase 1b clinical trial.
We have obtained sufficient quantities of pociredir from a contract manufacturing organization to complete our Phase 1b clinical trial.
Key inclusion criteria includes patients with certain frequencies of vaso-occlusive crises and/or other specified measures of severity, previous experience with hydroxyurea, and previous experience with a stable dose of voxelotor, crizanlizumab, or L-glutamine (or lack of access to these advanced therapies).
The protocol was amended to revise the inclusion and exclusion criteria to target patients with higher disease severity. Key inclusion criteria includes patients with certain frequencies of vaso-occlusive crises and/or other specified measures of severity, previous experience with hydroxyurea, and previous experience with a stable dose of voxelotor, crizanlizumab, or L-glutamine or lack of access to these advanced therapies.
Increases in HbF have been shown to reduce the frequency or severity of a broad range of SCD symptoms, including VOC, anemia, pain, infection, stroke and others.
Subjects with asterisks were on background hydroxyurea. Increases in HbF have been shown to reduce the frequency or severity of a broad range of SCD symptoms, including VOC, anemia, pain, infection, stroke and others.
Item 1. Bu siness. Overview We are a clinical-stage biopharmaceutical company focused on developing small molecules to improve the lives of patients with genetically defined rare diseases in areas of high unmet medical need. Our most advanced clinical-stage product candidate, losmapimod, is being developed for the potential treatment of facioscapulohumeral muscular dystrophy, or FSHD.
Item 1. Bu siness. Overview We are a clinical-stage biopharmaceutical company focused on developing small molecules to improve the lives of patients with genetically defined rare diseases in areas of high unmet medical need. Our clinical-stage product candidate, pociredir, is being developed for the potential treatment of sickle cell disease, or SCD.
Key exclusion criteria excludes subjects currently on or having received hydroxyurea and voxelotor, crizanlizumab or L-glutamine within 60 days prior to initiating pociredir.
Key exclusion criteria excludes subjects currently on or having received hydroxyurea within 60 days prior to initiating pociredir.
Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval.
Some countries may require the completion of additional studies that compare the cost- effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval.
However, allo-HSCT is more commonly offered to pediatric individuals with an available HLA-matched sibling donor. The 5-year survival rates in this young population is quite high but for older individuals (>16 years), the survival rates can be considerably lower. There are also significant risks associated with allo-HSCT including infertility and graft-versus-host disease.
The 5-year survival rates in this young population is quite high but for older individuals (>16 years), the survival rates can be considerably lower. There are also significant risks associated with allo-HSCT including infertility and graft-versus-host disease.
Although we commenced enrollment in the 12 mg dose cohort, in February 2023 the U.S. Food and Drug Administration, or FDA, placed a full clinical hold on the Investigational New Drug, or IND, application for pociredir for SCD, which was lifted in August 2023.
Although we commenced enrollment in the 12 mg dose cohort, in February 2023 the FDA placed a full clinical hold on the IND application for pociredir for SCD, which was lifted in August 2023.
Identification of the Drug Target for SCD We conducted target identification and validation activities using human umbilical cord blood-derived erythroid progenitor 2, or HUDEP2, cells as a model to study HbF reactivation. HUDEP2 cells are immature RBCs.
We believe that pociredir may address the root cause of SCD through this mechanism of action. Identification of the Drug Target for SCD We conducted target identification and validation activities using human umbilical cord blood-derived erythroid progenitor 2, or HUDEP2, cells as a model to study HbF reactivation. HUDEP2 cells are immature RBCs.
Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the Biden administration may reverse or otherwise change these measures, both the Biden administration and Congress have indicated that they will continue to seek new legislative measures to control drug costs.
Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the sitting presidential administration may reverse or otherwise change these measures, it is expected that the presidential administration and Congress will continue to seek new measures to control drug costs.
There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and biologics and other medical products, government control and other changes to the health care system in the United States.
There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and biologics and other medical products, government control and other changes to the health care system in the United States. 25 In 2010, the United States Congress enacted the ACA, which, among other things, included changes to the coverage and payment for drug products under government health care programs.
Our Behaviors Support Our Mission We believe success comes when we and our employees align with our mission to improve the lives of patients with genetically-defined rare diseases in areas of high unmet medical need.
Our success also depends on our ability to attract, engage and retain a diverse group of employees. Our Behaviors Support Our Mission We believe success comes when we and our employees align with our mission to improve the lives of patients with genetically-defined rare diseases in areas of high unmet medical need.
Our Pipeline Using our discovery approach, we have generated a pipeline of potentially disease-modifying therapies that address the known root causes of rare genetic diseases. The following chart summarizes key information about our pipeline of clinical stage and pre-clinical programs.
Our discovery approach led to the identification of pociredir for SCD, as well as other drug candidates. 1 Our Pipeline Using our discovery approach, we have generated a pipeline of potentially disease-modifying therapies that address the known root causes of rare genetic diseases. The following chart summarizes key information about our pipeline of clinical stage and pre-clinical programs.
In particular, the MHRA will be responsible for approving all medicinal products destined for the UK market (i.e., Great Britain and Northern Ireland), and the EMA will no longer have any role in approving medicinal products destined for Northern Ireland.
In particular, the MHRA is now responsible for approving all medicinal products destined for the UK market (i.e., Great Britain and Northern Ireland), and the EMA no longer has any role in approving medicinal products destined for Northern Ireland under the centralized procedure.
Four of the 23 TEAEs were characterized as VOCs, and were deemed unrelated to pociredir; one of these was reported as a serious adverse event, or SAE, with acute chest syndrome in a subject who was non-adherent to study drug administration.
Four of the 23 TEAEs were characterized as VOCs, and were deemed unrelated to pociredir; one of these was reported as a serious adverse event, or SAE, with acute chest syndrome in a subject who was non-adherent to study drug administration. 7 Clinical Trial: Phase 1 Healthy Volunteers In the fourth quarter of 2020, we initiated a Phase 1 clinical trial of pociredir in healthy adult volunteers.
Orphan Drug Designation and Exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a product available in the United States for treatment of the disease or condition will be recovered from sales of the product.
The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. 22 Orphan Drug Designation and Exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a product available in the United States for treatment of the disease or condition will be recovered from sales of the product.
Gene therapies need to be administered in an in-patient procedure known as HSCT. As part of the transplant process, the patient receives myeloablative chemotherapy to remove the original unedited stem cells in the bone marrow in order to enable the genetically modified stem cells to engraft. An additional potentially curative treatment currently approved for severe SCD populations is allo-HSCT.
Gene therapies need to be administered in an in-patient procedure known as HSCT. As part of the transplant process, the patient receives myeloablative chemotherapy to remove the original unedited stem cells in the bone marrow in order to enable the genetically modified stem cells to engraft.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.
On February 27, 2023, the UK government and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework”. This new framework fundamentally changes the existing system under the Northern Ireland Protocol, including with respect to the regulation of medicinal products in the UK.
On February 27, 2023, the UK government and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the “Windsor Framework”.
BLAs are submitted for approval of biologic products. Under federal law, the submission of most NDAs is subject to an application user fee, which for federal fiscal year 2023 is $3,242,026 for an application requiring clinical data. The sponsor of an approved NDA is also subject to an annual program fee, which for fiscal year 2023 is $393,933.
BLAs are submitted for approval of biologic products. Under federal law, the submission of most NDAs is subject to an application user fee. The sponsor of an approved NDA is also subject to an annual program fee.
We aim to create an equitable, inclusive and empowering work environment in which our employees can grow and advance their careers, with the overall goal of developing, expanding and retaining our workforce to support our current pipeline and future business goals. Our success also depends on our ability to attract, engage and retain a diverse group of employees.
We value the health and wellness of our employees and their families. We aim to create an equitable, inclusive and empowering work environment in which our employees can grow and advance their careers, with the overall goal of developing, expanding and retaining our workforce to support our current pipeline and future business goals.
Despite Brexit, the EU and UK GDPR remain largely aligned. Currently, the most impactful point of divergence relates to transfer mechanisms (i.e., the ability for EU/UK companies to transfer personal information to third countries, including the United States), because it requires us to implement a variety of different contractual clauses approved by EU or UK regulators.
Currently, the most impactful point of divergence relates to transfer mechanisms (i.e., the ability for EU/UK companies to transfer personal information to third countries, including the United States), because it requires us to implement a variety of different contractual clauses approved by EU or UK regulators. There may be further divergence in the future, including with regard to administrative burdens.
We also observed improved biomarkers of hemolysis in evaluable subjects dosed at 6 mg. The figures below illustrate percentage HbF increase by HPLC and absolute percentage HbF change from baseline for evaluable subjects (n=7) in the 6 mg dose cohort. Subjects with asterisks were on background hydroxyurea.
These data suggested no difference in response in subjects on (n=3) and off (n=7) background hydroxyurea. We also observed improved biomarkers of hemolysis in evaluable subjects dosed at 6 mg. The figures below illustrate percentage HbF increase by high-performance liquid chromatography, or HPLC and absolute percentage HbF change from baseline for evaluable subjects (n=7) in the 6 mg dose cohort.
We also intend to seek patent term extensions in any jurisdictions where available, however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
We also intend to seek patent term extensions in any jurisdictions where available, however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions. 12 In addition to patent protection, we rely upon unpatented trade secrets and confidential know-how and continuing technological innovation to develop and maintain our competitive position.
The Phase 1b clinical trial is being re-initiated at the 12 mg once daily dose level, with that cohort expected to enroll approximately 10 patients, and will be followed by an additional cohort of approximately 10 patients at the 20 mg once daily dose level.
The Phase 1b clinical trial has been re-initiated at the 12 mg once daily dose level, with that cohort expected to enroll approximately 10 patients, followed by an additional cohort of approximately 10 patients at the 20 mg once daily dose level. Patients are evaluated over a 12-week treatment period.
Pediatric Studies Under the Pediatric Research Equity Act of 2003, or PREA, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life. 17 Pediatric Studies Under the Pediatric Research Equity Act of 2003, or PREA, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
The benefit of accelerated approval derives from the potential to receive approval based on surrogate endpoints sooner than possible for trials with clinical or survival endpoints, rather than deriving from any explicit shortening of the FDA approval timeline, as is the case with Priority Review.
The benefit of accelerated approval derives from the potential to receive approval based on surrogate endpoints sooner than possible for trials with clinical or survival endpoints, rather than deriving from any explicit shortening of the FDA approval timeline, as is the case with Priority Review. 19 The accelerated approval pathway is contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the product’s clinical benefit.
Once the European Commission’s legislative proposals are approved (with or without amendment), they will be adopted into EU law. General Data Protection Regulation The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the EU GDPR, which became effective on May 25, 2018.
General Data Protection Regulation The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the EU GDPR, which became effective on May 25, 2018.
The new Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials in the EU. Under the new coordinated procedure for the approval of clinical trials, the sponsor of a clinical trial is required to submit a single application for approval of a clinical trial to a reporting EU Member State through an EU Portal.
Under the new coordinated procedure for the approval of clinical trials, the sponsor of a clinical trial is required to submit a single application for approval of a clinical trial to a reporting EU Member State through the EU portal known as the Clinical Trials Information System, or CTIS.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe anticipate that our expenses will increase substantially as we: • continue our clinical development of losmapimod and pociredir; • continue our ongoing preclinical studies; • advance clinical-stage product candidates through later stage trials, such as REACH, the Phase 3 clinical trial of losmapimod for the treatment of FSHD; • pursue the discovery of drug targets for other genetically-defined rare diseases and the subsequent development of any resulting product candidates, including for Diamond Blackfan Anemia under our recent license agreement with CAMP4; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • scale up our manufacturing processes and capabilities, or arrange for a third party to do so on our behalf, to support our clinical trials of our product candidates and commercialization of any of our product candidates for which we may obtain marketing approval; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval; • acquire or in-license products, product candidates, technologies and/or data referencing rights, such as our recent agreement with CAMP4; • make any milestone payments to affiliates of GlaxoSmithKline plc, or GSK, under our right of reference and license agreement with GSK upon the achievement of specified clinical or regulatory milestones, or to CAMP4 under our license agreement with CAMP4; • maintain, expand, enforce, defend and protect our intellectual property; • hire additional clinical, quality control and scientific personnel; and • add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and our operations as a public company.
Biggest changeWe anticipate that our expenses will increase substantially as we: • continue our clinical development of pociredir and any future product candidates; • continue our ongoing preclinical studies; • pursue the discovery of drug targets for other genetically-defined rare diseases and the subsequent development of any resulting product candidates, including for the potential treatment of inherited aplastic anemias, such as DBA, Shwachman-Diamond syndrome, and Fanconi anemia under our license agreement with CAMP4; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • acquire or in-license products, product candidates, technologies and/or data referencing rights, such as our agreement with CAMP4; • make any milestone payments to CAMP4 under our license agreement with CAMP4; • maintain, expand, enforce, defend and protect our intellectual property; • hire additional clinical, quality control and scientific personnel as needed; • scale up our manufacturing processes and capabilities, or arrange for a third party to do so on our behalf, to support our clinical trials of any product candidate and commercialization of any of product candidates for which we may obtain marketing approval; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval and that we have not out-licensed; and • add operational, financial and management information systems and personnel, including personnel to support our product development and any future commercialization efforts, as needed, and our operations as a public company. 35 To become and remain profitable, we must succeed in developing, and eventually commercializing, a product or products that generate significant revenue.
Increased volatility and decreases in market prices of equity securities generally and of our common stock in particular may have an adverse impact on our willingness and/or ability to continue to sell our common stock through an ATM offering program.
Increased volatility and decreases in market prices of equity securities generally and of our common stock in particular may have an adverse impact on our willingness and/or ability to continue to sell our common stock through our ATM offering program.
We have not yet demonstrated our ability to successfully develop any product candidate, obtain regulatory approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
We have not yet demonstrated our ability to successfully develop any product candidate, obtain regulatory approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization or arrange for a third party to do so on our behalf.
For example, the CCPA as amended by the California Privacy Rights Act, has created certain requirements for data use, sharing and transparency, and provides California residents certain rights concerning their personal information, such as access, correction, deletion and opt out of or selling or sharing such data.
For example, the CCPA as amended by the California Privacy Rights Act, has created certain requirements for data use, sharing and transparency, and provides California residents certain rights concerning their personal information, such as access, correction, deletion and opt out of selling or sharing such data.
The market price for our common stock may be influenced by many factors, including: • results of or developments in preclinical studies and clinical trials of our product candidates or those of our competitors or potential collaborators; • our success in commercializing our product candidates, if and when approved; • the success of competitive products or technologies; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other intellectual property or proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license products, product candidates, technologies or data referencing rights, the costs of commercializing any such products and the costs of development of any such product candidates or technologies; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or the financial results of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • results of or developments in preclinical studies and clinical trials of our product candidates or those of our competitors or potential collaborators; • our success in commercializing our products, if and when approved; • the success of competitive products or technologies; • regulatory or legal developments in the United States and other countries; • developments or disputes concerning patent applications, issued patents or other intellectual property or proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license products, product candidates, technologies or data referencing rights, the costs of commercializing any such products and the costs of development of any such product candidates or technologies; 74 • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or the financial results of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
Among other things, these provisions: • establish a classified board of directors such that only one of three classes of directors is elected each year; • allow the authorized number of our directors to be changed only by resolution of our board of directors; • limit the manner in which stockholders can remove directors from our board of directors; • establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; • limit who may call stockholder meetings; • authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and • require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal specified provisions of our certificate of incorporation or bylaws.
Among other things, these provisions: • establish a classified board of directors such that only one of three classes of directors is elected each year; • allow the authorized number of our directors to be changed only by resolution of our board of directors; • limit the manner in which stockholders can remove directors from our board of directors; • establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; 73 • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; • limit who may call stockholder meetings; • authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and • require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal specified provisions of our certificate of incorporation or bylaws.
If one or more of our product candidates receives regulatory approval, and we, or others, later discover that they are less effective than previously believed, or cause undesirable side effects, a number of potentially significant negative consequences could result, including: • withdrawal or limitation by regulatory authorities of approvals of such product; • seizure of the product by regulatory authorities; • recall of the product; • restrictions on the marketing of the product or the manufacturing process for any component thereof; • requirement by regulatory authorities of additional warnings on the label, such as a “black box” warning or contraindication; • requirement that we implement a REMS or create a medication guide outlining the risks of such side effects for distribution to patients; • commitment to expensive post-marketing studies as a prerequisite of approval by regulatory authorities of such product; • the product may become less competitive; • initiation of regulatory investigations and government enforcement actions; • initiation of legal action against us to hold us liable for harm caused to patients; and • harm to our reputation and resulting harm to physician or patient acceptance of our products.
If one or more of our product candidates receives regulatory approval, and we, or others, later discover that they are less effective than previously believed, or cause undesirable side effects, a number of potentially significant negative consequences could result, including: • withdrawal or limitation by regulatory authorities of approvals of such product; • seizure of the product by regulatory authorities; • recall of the product; • restrictions on the marketing of the product or the manufacturing process for any component thereof; 44 • requirement by regulatory authorities of additional warnings on the label, such as a “black box” warning or contraindication; • requirement that we implement a REMS or create a medication guide outlining the risks of such side effects for distribution to patients; • commitment to expensive post-marketing studies as a prerequisite of approval by regulatory authorities of such product; • the product may become less competitive; • initiation of regulatory investigations and government enforcement actions; • initiation of legal action against us to hold us liable for harm caused to patients; and • harm to our reputation and resulting harm to physician or patient acceptance of our products.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may have various consequences, including: • suspension of or restrictions on such products, manufacturers or manufacturing processes; • restrictions and warnings on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning letters or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • fines, restitution or disgorgement of profits or revenues; • suspension of any ongoing clinical trials; • suspension or withdrawal of marketing approvals; • damage to relationships with any potential collaborators; • unfavorable press coverage and damage to our reputation; • refusal to permit the import or export of our products; • product seizure or detention; • injunctions or the imposition of civil or criminal penalties; or • litigation involving patients using our products.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may have various consequences, including: • suspension of or restrictions on such products, manufacturers or manufacturing processes; • restrictions and warnings on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning letters or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; 66 • recall of products; • fines, restitution or disgorgement of profits or revenues; • suspension of any ongoing clinical trials; • suspension or withdrawal of marketing approvals; • damage to relationships with any potential collaborators; • unfavorable press coverage and damage to our reputation; • refusal to permit the import or export of our products; • product seizure or detention; • injunctions or the imposition of civil or criminal penalties; or • litigation involving patients using our products.
For example: • others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own; • we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent applications that we license or may own in the future; • we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or in-licensed intellectual property rights; • it is possible that our owned and in-licensed pending patent applications or those we may own or in-license in the future will not lead to issued patents; • issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • we cannot ensure that any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable product candidates or will provide us with any competitive advantages; • we cannot ensure that our commercial activities or product candidates will not infringe upon the patents of others; • we cannot ensure that we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own or license expire; • portions of our discovery technology are protected by trade secrets, but much is not protected by intellectual property, including patents, trade secrets and know-how, and we may not be able to develop, acquire or in-license any patentable technologies or other intellectual property related to the unprotected portions of our discovery portfolio; • we may not develop additional proprietary technologies that are patentable; • the patents of others may harm our business; and • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
For example: • others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own; • we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent applications that we license or may own in the future; • we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions; 62 • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or in-licensed intellectual property rights; • it is possible that our owned and in-licensed pending patent applications or those we may own or in-license in the future will not lead to issued patents; • issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidate; • we cannot ensure that any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable product candidates or will provide us with any competitive advantages; • we cannot ensure that our commercial activities or product candidates will not infringe upon the patents of others; • we cannot ensure that we will be able to successfully commercialize our product candidates on a substantial scale, if approved, before the relevant patents that we own or license expire; • portions of our discovery technology are protected by trade secrets, but much is not protected by intellectual property, including patents, trade secrets and know-how, and we may not be able to develop, acquire or in-license any patentable technologies or other intellectual property related to the unprotected portions of our discovery portfolio; • we may not develop additional proprietary technologies that are patentable; • the patents of others may harm our business; and • we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines or manufacture our product candidates in accordance with regulatory requirements, if there are disagreements between us and such parties or if such parties are unable to expand capacities to support commercialization of any of our product candidates for which we obtain marketing approval, we may not be able to fulfill, or may be delayed in producing sufficient product candidates to meet, our supply requirements, or we may be forced to manufacture the materials ourselves, for which we may not have the capabilities or resources, or enter into an agreement with a different manufacturer, which we may not be able to do on reasonable terms, if at all.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines or manufacture our product candidates in accordance with regulatory requirements, if there are disagreements between us and such parties or if such parties are unable to expand capacities to support commercialization of any of our product candidates for which we obtain marketing approval, we may not be able to fulfill, or may be delayed in producing sufficient product candidates to meet, our supply requirements, or we may be forced to manufacture the materials ourselves, for which we may not have the capabilities or resources, or enter into an agreement with a different manufacturer, which we may not be able to do on 48 reasonable terms, if at all.
Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and operating results. Item 1B. Unresolve d Staff Comments. Not applicable.
Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and operating results. 76 Item 1B. Unresolve d Staff Comments. Not applicable.
For example, under Section 174 of the U.S. Internal Revenue Code of 1986, as amended, or the Code, in taxable years beginning after December 31, 2021, expenses that are incurred for research and development in the United States will be capitalized and amortized, which may have an adverse effect on our cash flow.
For example, under Section 174 of the U.S. Internal Revenue Code of 38 1986, as amended, or the Code, in taxable years beginning after December 31, 2021, expenses that are incurred for research and development in the United States will be capitalized and amortized, which may have an adverse effect on our cash flow.
Uncertainties resulting from the initiation and continuation of intellectual property litigation or other proceedings could compromise our ability to compete in the marketplace. Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Uncertainties resulting from the initiation and continuation of intellectual property litigation or other proceedings could compromise our ability to compete in the marketplace. 59 Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
The risks of being involved in such litigation and proceedings may increase if and as our product candidates near commercialization and as we gain the greater visibility associated with being a public company. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of merit.
The risks of being involved in such litigation 58 and proceedings may increase if and as our product candidates near commercialization and as we gain the greater visibility associated with being a public company. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future, regardless of merit.
In addition, our supply chain may be adversely impacted if any of our third-party contract manufacturers become subject to injunctions or other sanctions as a result of their non-compliance with environmental, health and safety laws and regulations. We are subject to anti-corruption laws, as well as export control laws, customs laws, sanctions laws and other laws governing our operations.
In addition, our supply chain may be adversely impacted if any of our third-party contract manufacturers become subject to injunctions or other sanctions as a result of their non-compliance with environmental, health and safety laws and regulations. 70 We are subject to anti-corruption laws, as well as export control laws, customs laws, sanctions laws and other laws governing our operations.
There is also the threat of consumer class actions related to these laws and the overall protection of personal data. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business.
There is also the threat of consumer class actions related to these laws and the overall protection of personal data. Even if we are not determined to have violated these laws, 68 government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which could harm our reputation and our business.
Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs, particularly as we hire additional financial and accounting employees to meet public company internal control and financial reporting requirements, and will make some activities more time-consuming and costly.
Our management and other personnel will need to 75 devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs, particularly as we hire additional financial and accounting employees to meet public company internal control and financial reporting requirements, and will make some activities more time-consuming and costly.
If we do not successfully identify, develop, obtain regulatory approval for and commercialize product candidates, we will not be able to generate product revenues. Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. The results of preclinical studies and early clinical trials may not be predictive of future results.
If we do not successfully identify, develop, obtain regulatory approval for and commercialize product candidates, we will not be able to generate product revenues. 40 Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. The results of preclinical studies and early clinical trials may not be predictive of future results.
Moreover, if we pursue and obtain approval for the same product for another indication for which we are not entitled to or do not have orphan drug exclusivity, our period of orphan exclusivity will not prevent third parties from obtaining approval for a competing drug containing the same active ingredient for use in this other, non-orphan indication.
Moreover, if we pursue and obtain approval for the same product for another indication for which we are not entitled to or do not have orphan drug exclusivity, our period of orphan 64 exclusivity will not prevent third parties from obtaining approval for a competing drug containing the same active ingredient for use in this other, non-orphan indication.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully develop and commercialize our product candidates, which would materially harm our business. We may not be successful in our efforts to build a pipeline of product candidates.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully develop and commercialize any product candidates, which would materially harm our business. We may not be successful in our efforts to build a pipeline of product candidates.
Failure to obtain marketing approval in foreign jurisdictions would prevent our product candidates from being marketed abroad. In order to market and sell our products in the European Union and many other foreign jurisdictions, we or our potential third-party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.
Failure to obtain marketing approval in foreign jurisdictions would prevent any product candidates from being marketed abroad. In order to market and sell our products in the European Union and many other foreign jurisdictions, we or our potential third-party collaborators must obtain separate marketing approvals and comply with numerous and varying regulatory requirements.
If our collaborator terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected. If we are not able to establish or maintain collaborations, we may have to alter our development and commercialization plans and our business could be adversely affected.
If our collaborator terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be adversely affected. 53 If we are not able to establish or maintain collaborations, we may have to alter our development and commercialization plans and our business could be adversely affected.
Even if we are successful in our efforts to replace our executive leadership, we cannot guarantee that we will not face similar turnover in the future. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy.
Even if we are successful in our efforts to replace our executive leadership, we cannot guarantee that we will not face similar turnover in the future. In addition, we rely on consultants and advisors, including scientific and clinical 72 advisors, to assist us in formulating our research and development and commercialization strategy.
In addition, the FDA can subsequently approve the same drug for the same condition if the FDA concludes that the later drug is clinically superior to the first drug to obtain orphan drug exclusivity because it is shown to be safer, more effective or makes a major contribution to patient care.
In addition, the FDA or the EMA can subsequently approve the same drug for the same condition if the FDA or the EMA concludes that the later drug is clinically superior to the first drug to obtain orphan drug exclusivity because it is shown to be safer, more effective or makes a major contribution to patient care.
If we commercialize our product candidates in foreign markets, we will be subject to additional risks and uncertainties, including: • economic weakness, including inflation, or political instability in particular economies and markets, which could include localized disputes that have a broader regional or global impact (such as the Russian invasion of Ukraine or recent hostilities in Israel and Gaza Strip); • the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements, many of which vary between countries; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • tariffs and trade barriers, as well as other governmental controls and trade restrictions; • other trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or foreign governments; • longer accounts receivable collection times; • longer lead times for shipping; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • workforce uncertainty in countries where labor unrest is common; • language barriers for technical training; • reduced protection of intellectual property rights in some foreign countries, and related prevalence of generic alternatives to therapeutics; • foreign currency exchange rate fluctuations and currency controls; • differing foreign reimbursement landscapes; • uncertain and potentially inadequate reimbursement of our products; and • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
If we commercialize our product candidates in foreign markets, we will be subject to additional risks and uncertainties, including: • economic weakness, including inflation, or political instability in particular economies and markets, which could include localized disputes that have a broader regional or global impact (such as the Russian invasion of Ukraine or recent hostilities in Israel, Lebanon, and the Gaza Strip); • the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements, many of which vary between countries; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • tariffs and trade barriers, as well as other governmental controls and trade restrictions; • other trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or foreign governments (such as the recent announced tariffs by the current U.S. administration); • longer accounts receivable collection times; • longer lead times for shipping; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • workforce uncertainty in countries where labor unrest is common; • language barriers for technical training; • reduced protection of intellectual property rights in some foreign countries, and related prevalence of generic alternatives to therapeutics; • foreign currency exchange rate fluctuations and currency controls; • differing foreign reimbursement landscapes; • uncertain and potentially inadequate reimbursement of our products; and • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
Collaborations pose a number of risks, including the following: • collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development of our product candidates or may elect not to continue or renew development programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may not pursue commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew commercialization programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that may divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product candidates on a discretionary basis; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates and products if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over intellectual property or proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly obtain, maintain, enforce, defend or protect our intellectual property or proprietary rights or may use our proprietary information in such a way as to potentially lead to disputes or legal proceedings that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations; • collaborators may infringe, misappropriate or otherwise violate the intellectual property or proprietary rights of third parties, which may expose us to litigation and potential liability; and • collaborations may be terminated for the convenience of the collaborator (e.g., termination of our collaboration with Acceleron Pharma, Inc., or Acceleron, following its acquisition by Merck & Co., or Merck), and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Collaborations pose a number of risks, including the following: • collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development of any of our product candidates or may elect not to continue or renew development programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; 52 • collaborators may not pursue commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew commercialization programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that may divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product candidates on a discretionary basis; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates and products if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over intellectual property or proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborators may not properly obtain, maintain, enforce, defend or protect our intellectual property or proprietary rights or may use our proprietary information in such a way as to potentially lead to disputes or legal proceedings that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations; • collaborators may infringe, misappropriate or otherwise violate the intellectual property or proprietary rights of third parties, which may expose us to litigation and potential liability; and • collaborations may be terminated for the convenience of the collaborator (e.g., our former collaboration with Acceleron Pharma, Inc.), and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Our ability to generate product revenues, which we do not expect will occur for several years, if ever, will depend heavily on the successful development, regulatory approval and eventual commercialization of our product candidates.
Our ability to generate product revenues, which we do not expect will occur for several years, if ever, will depend heavily on the successful development, regulatory approval and eventual commercialization of any of our product candidates.
In addition, the FDA generally requires pre-approval of promotional materials for products under consideration for accelerated approval, which could adversely impact the timing of the commercial launch of the product.
In addition, the FDA generally requires pre-approval of promotional materials for products under consideration for accelerated approval, which could adversely 65 impact the timing of the commercial launch of the product.
In August 2022, we announced a workforce reduction in our research and development function, which may make us a less attractive employer to future candidates. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
In August 2022 and September 2024, we announced a workforce reduction in our research and development function, which may make us a less attractive employer to future candidates. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
If any of our assumptions or estimates, or these publications, research, surveys or studies prove to be inaccurate, then the actual market for any of our product candidates may be smaller than we expect, and as a result our product revenue may be limited and it may be more difficult for us to achieve or maintain profitability.
If any of our assumptions or estimates, or these publications, research, surveys or studies prove to be inaccurate, then the actual market for our product candidate may be smaller than we expect, and as a result our product revenue may be limited and it may be more difficult for us to achieve or maintain profitability.
Our reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts. We do not have any manufacturing facilities.
Our reliance on third parties increases the risk that we will not have sufficient quantities of our product candidate or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts. We do not have any manufacturing facilities.
In addition, although we believe we have obtained sufficient quantities of pociredir from a CMO for the completion of our Phase 1b clinical trial for SCD, we cannot be sure we have correctly estimated our drug product requirements, which could delay, prevent or impair our development efforts.
Although we believe we have obtained sufficient quantities of pociredir from a CMO for the completion of our Phase 1b clinical trial for SCD, we cannot be sure we have correctly estimated our drug product requirements, which could delay, prevent or impair our development efforts.
Item 1A. Ris k Factors. Our future operating results could differ materially from the results described in this Annual Report on Form 10-K due to the risks and uncertainties described below. You should consider carefully the following information about risks below in evaluating our business.
Item 1A. Risk Factors. Our future operating results could differ materially from the results described in this Annual Report on Form 10-K due to the risks and uncertainties described below. You should consider carefully the following information about risks below in evaluating our business.
The exclusivity period in the European Union can be reduced to six years at the end of the fifth year if it is determined that a drug no longer meets the criteria for orphan drug designation, including if the drug is sufficiently profitable so that market exclusivity is no longer justified.
The exclusivity period in the European Union can be reduced to six years at the end of the fifth year if it is determined that a product no longer meets the criteria for orphan designation, including if the product is sufficiently profitable so that market exclusivity is no longer justified.
Adequate additional financing may not be available to us on acceptable terms, or at all, and may become even more difficult to obtain due to rising interest rates and the current downturn in the U.S. capital markets and the biotechnology sector in general.
Adequate additional financing may not be available to us on acceptable terms, or at all, and may become even more difficult to obtain due to rising interest rates and the recent downturn in the U.S. capital markets and the biotechnology sector in general.
Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain for any products that are approved in the United States or foreign jurisdictions.
Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidate and affect the prices we may obtain for any products that are approved in the United States or foreign jurisdictions.
If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of our product candidates or discovery stage programs or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates.
If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for one or more of our product candidates or discovery stage programs or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to bring our product candidates to market.
The success of our product candidates will depend on several factors, including the following: • successfully completing preclinical studies and clinical trials; • allowance by the FDA or other regulatory agencies of the INDs, clinical trial applications, or CTAs, or other regulatory filings for losmapimod, pociredir and future product candidates; • expanding and maintaining a workforce of experienced scientists and others to continue to develop our product candidates; • applying for and receiving marketing approvals from applicable regulatory authorities; • obtaining and maintaining intellectual property protection and regulatory exclusivity for our product candidates; • making arrangements with third-party manufacturers for, or establishing, commercial manufacturing capabilities; • establishing sales, marketing and distribution capabilities and successfully launching commercial sales of the products, if and when approved, whether alone or in collaboration with others; • acceptance of the products, if and when approved, by patients, the medical community and third-party payors; • effectively competing with other therapies; • obtaining and maintaining coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors; • maintaining, enforcing, defending and protecting our rights in our intellectual property portfolio; • not infringing, misappropriating or otherwise violating others’ intellectual property or proprietary rights; and • maintaining a continued acceptable safety profile of the products following receipt of any regulatory approvals.
The success of any of our product candidates will depend on several factors, including the following: • successfully completing preclinical studies and clinical trials; • allowance by the FDA or other regulatory agencies of the INDs, clinical trial applications, or CTAs, or other regulatory filings; • expanding and maintaining a workforce of experienced scientists and others to continue development efforts; • applying for and receiving marketing approvals from applicable regulatory authorities; • obtaining and maintaining intellectual property protection and regulatory exclusivity; • making arrangements with third-party manufacturers for, or establishing, commercial manufacturing capabilities; • establishing sales, marketing and distribution capabilities and successfully launching commercial sales, if and when approved, whether alone or in collaboration with others; • acceptance, if and when approved, by patients, the medical community and third-party payors; • effectively competing with other therapies; • obtaining and maintaining coverage, adequate pricing and adequate reimbursement from third-party payors, including government payors; • maintaining, enforcing, defending and protecting our rights in our intellectual property portfolio; • not infringing, misappropriating or otherwise violating others’ intellectual property or proprietary rights; and • maintaining a continued acceptable safety profile following receipt of any regulatory approvals.
For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical employees and stop critical activities.
For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.
We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
We expect to expand our development and regulatory capabilities and, if appropriate, potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
If serious adverse events or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit our development of some of our product candidates.
If serious adverse events or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit our development of our product candidate.
For example, on December 8, 2023, the FDA approved CASGEVY (exagamglogene autotemcel) and LYFGENIA (lovotibeglogene autotemcel), the first ex vivo cell-based gene therapies for the treatment of SCD. CASGEVY has also been FDA-approved for the treatment of transfusion-dependent beta-thalassemia.
For example, in December 2023, the FDA approved CASGEVY (exagamglogene autotemcel) and LYFGENIA (lovotibeglogene autotemcel), the first ex vivo cell-based gene therapies for the treatment of SCD. CASGEVY has also been FDA-approved for the treatment of transfusion-dependent beta-thalassemia.
If we are unable to obtain adequate levels of reimbursement, our ability to successfully market and sell our product candidates will be adversely affected. We rely, and expect to continue to rely, on CMOs to manufacture our product candidates.
If we are unable to obtain adequate levels of reimbursement, our ability to successfully market and sell any approved products will be adversely affected. We rely, and expect to continue to rely, on CMOs to manufacture our product candidates.
The FDA granted fast track designation to losmapimod for the treatment of FSHD and to pociredir for the treatment of SCD, and we may seek fast track designation for some of our other product candidates as well as breakthrough therapy designation, including for losmapimod.
The FDA granted fast track designation to pociredir for the treatment of SCD, and we may seek fast track designation for some of our other product candidates as well as breakthrough therapy designation.
If and when our product candidates receive FDA approval, we expect to apply for patent term extensions where applicable, but there is no guarantee that the applicable governmental authorities will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
If and when our 56 product candidate receives FDA approval, we expect to apply for patent term extensions where applicable, but there is no guarantee that the applicable governmental authorities will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
We expect to devote substantial financial resources to our ongoing and planned activities, particularly as we continue our ongoing and planned clinical trials of losmapimod and pociredir, continue research and development and initiate additional clinical trials of, and seek regulatory approval for, these and other product candidates.
We expect to devote substantial financial resources to our ongoing and planned activities, particularly as we continue our clinical development of pociredir, continue research and development and initiate additional clinical trials of, and seek regulatory approval for, this and any other product candidates.
In August 2022 the Inflation Reduction Act of 2022 was passed, which among other things, allows for Centers for Medicare & Medicaid Services to negotiate prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D, beginning with select high-cost drugs in 2026.
For example, the Inflation Reduction Act of 2022, among other things, allows for Centers for Medicare & Medicaid Services to negotiate prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D, beginning with select high-cost drugs in 2026.
Under the Food and Drug Omnibus Reform Act of 2022, or FDORA, the FDA is permitted to require, as appropriate, that a post-approval confirmatory study or studies be underway prior to approval or within a specified time period after the date of approval for a product granted accelerated approval.
Under the Food and Drug Omnibus Reform Act of 2022, or FDORA, the FDA may require that a post-approval confirmatory study or studies be underway prior to approval or within a specified time period after the date of approval for a product granted accelerated approval.
Our future capital requirements will depend on many factors, including: • the progress, costs and results of our ongoing clinical trials of losmapimod, including REACH, the Phase 3 clinical trial of losmapimod for the treatment of FSHD, which completed enrollment in September 2023, and our Phase 1b clinical trial of pociredir in SCD; • additional planned clinical trials; • the scope, progress, costs and results of discovery research, preclinical development, laboratory testing and clinical trials for our current product candidates in additional indications or for any future product candidates that we may pursue; • the number of and development requirements for other product candidates that we pursue; • the costs, timing and outcome of regulatory review of our product candidates; • our ability to enter into contract manufacturing arrangements for supply of active pharmaceutical ingredient, or API, and manufacture of our product candidates and the terms of such arrangements; • the success of our collaboration with MyoKardia or under our recent license agreement with CAMP4; • our ability to establish and maintain additional strategic collaborations, licensing or other arrangements and the financial terms of such arrangements; • the payment or receipt of milestones, royalties and other collaboration-based revenues, if any; • the costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval; • the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims; • the extent to which we acquire or in-license other products, product candidates, technologies or data referencing rights.
Our future capital requirements will depend on many factors, including: • the progress, costs and results of our ongoing Phase 1b clinical trial of pociredir in SCD; • additional planned clinical trials; • the scope, progress, costs and results of discovery research, preclinical development, laboratory testing and clinical trials for any of our product candidates in additional indications or for any future product candidates that we may pursue; • the number of and development requirements for other product candidates that we pursue; • the costs, timing and outcome of regulatory review of our product candidates; • our ability to enter into contract manufacturing arrangements for supply of API and manufacture of our product candidates and the terms of such arrangements; • the success of our collaboration with MyoKardia or under our license agreement with CAMP4; • our ability to establish and maintain additional strategic collaborations, licensing or other arrangements and the financial terms of such arrangements; • the payment or receipt of milestones, royalties and other collaboration-based revenues, if any; • the costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval and that we do not out-license for commercialization; 36 • the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims; and • the extent to which we acquire or in-license other products, product candidates, technologies or data referencing rights.
If one of our product candidates is approved and a patent covering that product candidate is not listed in the Orange Book, an ANDA applicant would not have to provide notice to us with respect to that patent. See Item 1 “Business—Intellectual Property” in this Annual Report on Form 10-K for additional information regarding patent laws and patent protection.
If one of our product candidates is approved and a patent covering that product candidate is not listed in the Orange Book, an ANDA applicant would not have to provide notice to us with respect to that patent. See Item 1 “Business—Intellectual Property” for additional information regarding patent laws and patent protection.
Patient enrollment is affected by a variety of other factors, including: • the prevalence and severity of the disease under investigation; • the eligibility criteria for the trial in question; • the perceived risks and benefits of the product candidate under trial; • the requirements of the trial protocols, including invasive procedures such as muscle biopsies or medical resonance imaging (MRI), which requires the use of specialized equipment; • the availability of existing treatments for the indications for which we are conducting clinical trials; • the ability to recruit clinical trial investigators with the appropriate competencies and experience; • the efforts to facilitate timely enrollment in clinical trials; • the patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; • the proximity and availability of clinical trial sites for prospective patients; • the conduct of clinical trials by competitors for product candidates that treat the same indications as our product candidates; • the ability to identify specific patient populations for biomarker-defined trial cohort(s); and • the cost to, or lack of adequate compensation for, prospective patients.
Patient enrollment is affected by a variety of other factors, including: • the prevalence and severity of the disease under investigation; • the eligibility criteria for the trial in question (such as with our trial of pociredir for SCD); • the perceived risks and benefits of the product candidate under trial; • the requirements of the trial protocols, including invasive procedures; • the availability of existing treatments for the indications for which we are conducting clinical trials; • the ability to recruit clinical trial investigators with the appropriate competencies and experience; • the efforts to facilitate timely enrollment in clinical trials; • the patient referral practices of physicians; • the ability to monitor patients adequately during and after treatment; 43 • the proximity and availability of clinical trial sites for prospective patients; • the conduct of clinical trials by competitors for product candidates that treat the same indications as our current or future product candidates; • the ability to identify specific patient populations for biomarker-defined trial cohort(s); and • the cost to, or lack of adequate compensation for, prospective patients.
If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may: • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling or a REMS that includes significant use or distribution restrictions or safety warnings; • be subject to additional post-marketing testing requirements; or • have the product removed from the market after obtaining marketing approval.
If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive, such as our recent topline data from the Phase 3 REACH trial, or are only modestly positive or if there are safety concerns, we may: • suspend further development (such as with losmapimod for FSHD); • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling or a REMS that includes significant use or distribution restrictions or safety warnings; • be subject to additional post-marketing testing requirements; or • have the product removed from the market after obtaining marketing approval.
Additionally, the number of recent departures has created some uncertainty. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products.
Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products.
We are only in the preliminary stages of most of these activities. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.
We are only in the preliminary stages of most of these activities for our current product candidates. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.
For example, while we believe that the specific and generic claims contained in our U.S. patent provide protection for the method of using losmapimod for the treatment of FSHD and while we also believe that the specific and generic claims contained in our issued and pending U.S. non-provisional and provisional applications provide protection for the pharmaceutical compositions and methods of use for pociredir, third parties may nevertheless challenge such claims.
For example, while we believe that the specific and generic claims contained in our issued and pending U.S. non-provisional and provisional applications provide protection for the pharmaceutical compositions and methods of use for pociredir, third parties may nevertheless challenge such claims.
We have experienced cyber incidents in the past, and we cannot guarantee that the measures we take to prevent, detect, and respond to cyber-attacks will be effective to prevent or remediate future incidents.
We, and our third party service providers, have experienced cyber incidents in the past, and we cannot guarantee that the measures we take to prevent, detect and respond to cyber-attacks will be effective to prevent or remediate future incidents.
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success.
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales.
We may also choose to further realign our operations to achieve additional operational efficiencies beyond the strategic realignment commenced in August 2022. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
We may also choose to further realign our operations to achieve additional operational efficiencies beyond the recent strategic realignment effected in September 2024. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
We are party to license and funding agreements, such as our agreement with GSK and our recent license agreement with CAMP4, and we may enter into additional licensing and funding arrangements with third parties that impose or may impose diligence, development and commercialization timelines, milestone payment, royalty, insurance and other obligations on us.
We are party to license and funding agreements, and we may enter into additional licensing and funding arrangements with third parties that impose or may impose diligence, development and commercialization timelines, milestone payment, royalty, insurance and other obligations on us.
If a prolonged government shutdown were to occur, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA and the SEC to timely review and process our submissions, which could have a material adverse effect on our business and our timelines.
We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, clinical, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing and distribution.
As we continue to expand our pipeline, we expect that we will experience growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, clinical, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing and distribution.
There are approved products in the EZH2 class of medications and their approved labeling outlines safety risks, including an increased risk of malignancies. In the event that pociredir has similar safety risks as other PRC2 medications, this could impact its acceptance.
EED is a member of the PRC2 complex, which also includes EZH2. There are approved products in the EZH2 class of medications and their approved labeling outlines safety risks, including an increased risk of malignancies. In the event that pociredir has similar safety risks as other PRC2 medications, this could impact its acceptance.
We revised the design of our clinical trial of pociredir in SCD to address the clinical hold imposed by the FDA, and there can be no certainty as to whether we will be successful in completing the clinical trial with its revised design, which include updated inclusion and exclusion criteria and thus a narrower set of eligible patients.
We revised the design of our clinical trial of pociredir in SCD to address the clinical hold imposed by the FDA, and there can be no certainty as to whether we will be successful in completing the clinical trial with its revised design, which include updated inclusion and exclusion criteria and thus a narrower set of eligible patients, which is making enrollment difficult despite opening a number of sites for such trial.
Our net loss was $97.3 million for the year ended December 31, 2023 and $109.9 million for the year ended December 31, 2022. As of December 31, 2023, we had an accumulated deficit of $509.7 million.
Our net loss was $9.7 million for the year ended December 31, 2024 and $97.3 million for the year ended December 31, 2023. As of December 31, 2024, we had an accumulated deficit of $519.4 million.
Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. We have not yet completed a pivotal clinical trial of any product candidate.
Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidate in humans.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • regulators or institutional review boards, or IRBs, may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • regulators may decide the design of our clinical trials is flawed, for example if our trial protocol does not evaluate treatment effects in trial subjects for a sufficient length of time; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • we may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful, or, if we seek accelerated approval, biomarker efficacy endpoints that applicable regulatory authorities would consider likely to predict clinical benefit; • preclinical testing may produce results based on which we may decide, or regulators may require us, to conduct additional preclinical studies before we proceed with certain clinical trials, limit the scope of our clinical trials, halt ongoing clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may decide, or regulators or IRBs may require us, to suspend or terminate clinical trials of our product candidates for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • regulators or IRBs may require us to perform additional or unanticipated clinical trials to obtain approval or we may be subject to additional post-marketing testing requirements to maintain regulatory approval; • regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs to suspend or terminate the trials; • unforeseen global instability, including political instability, such as the Russian invasion of Ukraine or recent hostilities in Israel and Gaza Strip, or instability from an outbreak of pandemic or contagious disease in or around the countries in which we conduct our clinical trials, could delay the commencement or rate of completion of our clinical trials; and • regulators may withdraw their approval of a product or impose restrictions on its distribution, such as in the form of a risk evaluation and mitigation strategy, or REMS.
Furthermore, the failure of any of our product candidates to demonstrate safety and efficacy in any clinical trial could negatively impact the perception of our other product candidates and/or cause the FDA or other regulatory authorities to require additional testing before approving any of our product candidates. 41 We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • regulators or institutional review boards, or IRBs, may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • regulators may decide the design of our clinical trials is flawed, for example if our trial protocol does not evaluate treatment effects in trial subjects for a sufficient length of time; • clinical trials of our product candidates may produce negative or inconclusive results, such as with the recent Phase 3 REACH trial, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • we may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful, or, if we seek accelerated approval, biomarker efficacy endpoints that applicable regulatory authorities would consider likely to predict clinical benefit; • preclinical testing may produce results based on which we may decide, or regulators may require us, to conduct additional preclinical studies before we proceed with certain clinical trials, limit the scope of our clinical trials, halt ongoing clinical trial(s) or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate (for example, we initially experienced difficulty enrolling patients who met the updated inclusion and exclusion criteria for our trial of pociredir in SCD) or participants may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may decide, or regulators or IRBs may require us, to suspend or terminate clinical trials of our product candidates for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • regulators or IRBs may require us to perform additional or unanticipated clinical trials to obtain approval or we may be subject to additional post-marketing testing requirements to maintain regulatory approval; • regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs to suspend or terminate the trials; • unforeseen global instability, including political instability, such as the Russian invasion of Ukraine or hostilities in Israel, Lebanon and the Gaza Strip, changes in U.S. economic policy that adversely impact the U.S. economy and/or economies worldwide, or instability from an outbreak of pandemic or contagious disease in or around the countries in which we conduct our clinical trials (such as closure of clinical trial sites, like we experienced in our ReDUX4 clinical trial due to COVID-19), could delay the commencement or rate of completion of our clinical trials; and • regulators may withdraw their approval of a product or impose restrictions on its distribution, such as in the form of a risk evaluation and mitigation strategy, or REMS. 42 Further, in February 2023, the FDA imposed a clinical hold on our IND for pociredir in SCD, which halted our clinical trial until the FDA lifted the clinical hold in August 2023.
It is impossible to predict when or if any of our product candidates will prove effective or safe in humans or will receive regulatory approval.
The risk of failure for product candidates is high and it is impossible to predict when or if any of our product candidates will prove effective or safe in humans or will receive regulatory approval.
These exemptions include: • not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting; • not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; • reduced disclosure obligations regarding executive compensation; and • exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
These scaled disclosure requirements include: • not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting; • not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; and • reduced disclosure obligations regarding executive compensation.
Regulatory authorities in some jurisdictions, including the United States and European Union, may designate drugs for relatively small patient populations as orphan drugs. The FDA and EMA have granted orphan drug designation to losmapimod for the treatment of FSHD. We may seek orphan drug designation for our other current and future product candidates.
Regulatory authorities in some jurisdictions, including the United States and European Union, may designate drugs for relatively small patient populations as orphan drugs. We may seek orphan drug designation for our other current and future product candidates.
Our ability to commercialize any product candidates successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
See Item 1 “Business — Government Regulation and Product Approval — Pharmaceutical Insurance Coverage and Health Care Reform.” Our ability to commercialize any product candidates successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
See Item 1 “Business—Competition” in this Annual Report on Form 10-K. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop.
See Item 1 “Business — Competition” for more information. 47 Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop.
As of February 20, 2023, our executive officers and directors and our stockholders who owned more than 5% of our outstanding common stock in the aggregate beneficially owned shares representing approximately 48.6% of our capital stock.
As of February 18, 2025, our executive officers and directors and our stockholders who owned more than 5% of our outstanding common stock in the aggregate beneficially owned shares representing approximately 71.3% of our capital stock.
If reimbursement of our products is unavailable or limited in scope, our business could be materially harmed. See Item 1 “Business—Government Regulation and Product Approval—Pharmaceutical Insurance Coverage and Health Care Reform” in this Annual Report on Form 10-K.
If reimbursement of our products is unavailable or limited in scope, our business could be materially harmed. See Item 1 “Business—Government Regulation and Product Approval—Pharmaceutical Insurance Coverage and Health Care Reform” for more information.
The legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for offering a price that is not equal to or less than the price negotiated under the law or for taking price increases that exceed inflation. The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation.
The legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for offering a price that is not equal to or less than the price negotiated under the law or for taking price increases that exceed inflation.
Collaborations are complex and time-consuming to negotiate and document. In addition, there have been a significant number of recent business combinations among large pharmaceutical and biotechnology companies that have resulted in a reduced number of potential future collaborators.
In addition, there have been a significant number of recent business combinations among large pharmaceutical and biotechnology companies that have resulted in a reduced number of potential future collaborators.
As a public company we have incurred, and particularly after we are no longer an EGC, we will continue to incur significant legal, accounting and other expenses that we did not incur as a private company.
As a public company we have incurred, and we will continue to incur significant legal, accounting and other expenses that we did not incur as a private company.
The process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.
If any of our product candidates receives marketing approval, the accompanying label may limit the approved use of our drug, which could limit sales of the product. 63 The process of obtaining marketing approvals, both in the United States and abroad, is expensive, may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.
Such registered shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates. We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
Such registered shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates. We are a “smaller reporting company,” and the scaled disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors. We are a “smaller reporting company,” or SRC.
Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws, which could have material adverse effect on our liquidity and on our business, financial condition or results of operations.
Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws, which could have material adverse effect on our liquidity and on our business, financial condition or results of operations. 39 Risks Related to the Discovery and Development of our Product Candidates We are early in our development efforts and we currently have one product candidate in active clinical development.
If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates and our business could be adversely affected. We have a collaboration and license agreement with MyoKardia (for certain genetically defined cardiomyopathies). See Item 1 “Business—License Agreements and Collaborations” in this Annual Report on Form 10-K.
If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates and our business could be adversely affected. We have a collaboration and license agreement with MyoKardia (for certain genetically defined cardiomyopathies).

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, we have implemented an enterprise risk management process, which addresses cyber risks. This process is led by our Chief Legal Officer and includes participation by the board of directors, as appropriate. Our Chief Legal Officer reports regularly on the enterprise risk management process to executive leadership and the audit committee.
Biggest changeThe management team will also update the full board of directors on matters related to cybersecurity as needed. Additionally, we have implemented an enterprise risk management process, which addresses cyber risks. This process is led by our Chief Legal Officer and includes participation by the board of directors, as appropriate.
Further, we intend to evaluate and update our existing cybersecurity policies and procedures as appropriate to continue to align them to our risk profile. We have a process to assess the security practices of certain third-party vendors, including through the use of vendor security questionnaires, as appropriate.
Further, we regularly evaluate and update our existing cybersecurity policies and procedures as appropriate to continue to align them to our risk profile. We have a process to assess the security practices of certain third-party vendors, including through the use of vendor security questionnaires, as appropriate.
The Executive Director and our Chief Legal Officer participate in periodic discussions with other members of our management, including executive leadership, regarding implementation of our cybersecurity program, program enhancements, and relevant cyber risks or threats. Our Chief Legal Officer has received the National Association of Corporate Directors CERT Certificate in Cyber-Risk Oversight. Our audit committee has oversight over cybersecurity risks.
The Executive Director and our Chief Legal Officer participate in periodic discussions with other members of our management, including executive leadership, regarding implementation of our cybersecurity program, program enhancements, and relevant cyber risks or threats. Our Chief Legal Officer has received the National Association of Corporate Directors CERT Certificate in Cyber-Risk Oversight.
With the input of the executive team, the Executive Director provides annual presentations to the audit committee on our cyber program, including updates on security testing and assessments, cyber risks, and related cyber strategy as applicable. The management team will also update the full board of directors on matters related to cybersecurity as needed.
Our audit committee has oversight over cybersecurity risks . With the input of the executive team, the Executive Director provides annual presentations to the audit committee on our cyber program, including updates on security testing and assessments, cyber risks, and related cyber strategy as applicable.
Added
Our Chief Legal Officer reports regularly on the enterprise risk management process to executive leadership and the audit committee.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn November 28, 2023, all defendants filed a motion to dismiss the Securities Action, which motion is currently pending. We intend to defend vigorously against this litigation. Item 4. Mine Saf ety Disclosures. Not applicable. PART II
Biggest changeOn November 28, 2023, all defendants filed a motion to dismiss the Securities Action. Briefing was completed on the motion in February 2024, and the court held a hearing on the motion in September 2024. The motion to dismiss is currently pending. We intend to defend vigorously against this litigation. Item 4. Mine Saf ety Disclosures.
The Securities Action alleges that the defendants made misleading statements and omitted to disclose material information related to the clinical hold and seeks, among other things, compensatory damages in connection with an allegedly inflated stock price between March 3, 2022, and March 8, 2023, as well as attorneys’ fees and costs.
The Securities Action alleges that the defendants made misleading statements and omitted to disclose material information related to the clinical hold and seeks, among other things, compensatory damages in connection with an allegedly inflated stock price between March 3, 2022, and March 8, 2023, as well as attorneys’ fees and 77 costs.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 45 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. Reserved 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 58 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 78 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 79 Item 6. Reserved 79 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 80 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 91 Item 8.
Removed
Financial Statements and Supplementary Data 58 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 58 Item 9A. Controls and Procedures 59

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Our Common Stock As of February 20, 2024, there were approximately 14 holders of record of shares of our common stock. This number does not include stockholders for whom shares are held in “nominee” or “street” name. Dividends We have never declared or paid any cash dividends on our capital stock.
Biggest changeHolders of Our Common Stock As of February 18, 2025, there were approximately 11 holders of record of shares of our common stock. This number does not include stockholders for whom shares are held in “nominee” or “street” name. Dividends We have never declared or paid any cash dividends on our capital stock.

Item 7. Management's Discussion & Analysis

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

48 edited+23 added−20 removed68 unchanged
Biggest changeThe decrease in research and development expense was primarily attributable to the following: • $3.8 million of decreased external research and development costs, primarily associated with decreased costs for pociredir as a result of the clinical hold from February 2023 to August 2023, and achievement of a $5.0 million milestone due to GSK upon initiation of REACH in the second quarter of 2022, partially offset by increased costs associated with the advancement of REACH as we completed enrollment in September 2023; • $0.8 million of decreased facilities costs; • $0.7 million of decreased laboratory costs; • partially offset by $0.3 million of increased employee compensation costs.
Biggest changeThe decrease in research and development expense was primarily attributable to the following: • $4.9 million of decreased external research and development costs, primarily due to $8.1 million of reimbursement from the global development cost sharing under our collaboration with Sanofi for losmapimod, partially offset by increased development costs associated with the advancement of REACH, as we completed enrollment in September 2023, as well as increased costs associated with pociredir; • $2.0 million of decreased laboratory costs; • $0.8 million of decreased employee compensation costs due to decreased headcount, which reflects a partial offset of $0.9 million in increased stock-based compensation expense; • $0.4 million of decreased facilities costs; and • $0.5 million of decreased other costs. 85 General and Administrative Expenses The following table summarizes our general and administrative expenses for the years ended December 31, 2024 and 2023: Year Ended December 31, Change (in thousands) 2024 2023 $ Employee compensation $ 19,754 $ 24,809 $ (5,055 ) Professional services 11,999 11,023 976 Facility costs 1,483 2,516 (1,033 ) Other 3,212 3,320 (108 ) Total general and administrative expenses $ 36,448 $ 41,668 $ (5,220 ) General and administrative expenses decreased by $5.3 million from $41.7 million for the year ended December 31, 2023 to $36.4 million for the year ended December 31, 2024.
This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.
This process involves reviewing open contracts and purchase orders, communicating 89 with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual cost.
Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of expenses incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses.
Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of expenses incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as 82 prepaid expenses.
A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets 90 will not be realized.
We expect our research and development expenses to increase significantly in future periods as we continue to implement our business strategy, which includes advancing losmapimod for the treatment of FSHD, advancing pociredir for the treatment of SCD, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, and seeking regulatory approvals for our product candidates that successfully complete clinical trials.
We expect our research and development expenses to increase in future periods as we continue to implement our business strategy, which includes advancing pociredir for the treatment of SCD, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, and seeking regulatory approvals for our product candidates that successfully complete clinical trials.
Our funding requirements and timing and amount of our operating expenditures will depend largely on: • the progress, costs and results of our clinical trials of losmapimod and pociredir; • the scope, progress, costs and results of discovery research, preclinical development, laboratory testing and clinical trials for our current product candidates in additional indications or for any future product candidates that we may pursue, including under our recent license agreement with CAMP4; • the number of and development requirements for other product candidates that we pursue; • the costs, timing and outcome of regulatory review of our product candidates; • our ability to enter into contract manufacturing arrangements for supply of API and manufacture of our product candidates and the terms of such arrangements; • the success of our collaboration with MyoKardia; • our ability to establish and maintain additional strategic collaborations, licensing or other arrangements and the financial terms of such arrangements; • the payment or receipt of milestones, royalties and other collaboration-based revenues, if any; • the costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval; • the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims; and • the extent to which we acquire or in-license other products, product candidates, technologies or data referencing rights.
Our funding requirements and timing and amount of our operating expenditures will depend largely on: • the progress, costs and results of our clinical trials of pociredir; • the scope, progress, costs and results of discovery research, preclinical development, laboratory testing and clinical trials for our current product candidates in additional indications or for any future product candidates that we may pursue, including under our license agreement with CAMP4; • the number of and development requirements for other product candidates that we pursue; • the costs, timing and outcome of regulatory review of our product candidates; • our ability to enter into contract manufacturing arrangements for supply of API and manufacture of our product candidates and the terms of such arrangements; 87 • the success of our collaboration with MyoKardia; • our ability to establish and maintain additional strategic collaborations, licensing or other arrangements and the financial terms of such arrangements; • the payment or receipt of milestones, royalties and other collaboration-based revenues, if any; • the costs and timing of future commercialization activities, including product manufacturing, sales, marketing and distribution, for any of our product candidates for which we may receive marketing approval and that we do not out-license to a third party; • the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property-related claims; and • the extent to which we acquire or in-license other products, product candidates, technologies or data referencing rights.
Following the clinical hold, we amended the protocol to revise the inclusion and exclusion criteria for the Phase 1b clinical trial to target patients with higher disease severity.
Following the clinical hold, we amended the protocol to revise the inclusion and exclusion criteria for the Phase 1b clinical trial to target subjects with higher disease severity.
Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $97.3 million and $109.9 million for the years ended December 31, 2023 and 2022, respectively.
Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $9.7 million and $97.3 million for the years ended December 31, 2024 and 2023, respectively.
We recognize revenue pursuant to ASC 606 when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
Revenue Recognition We account for revenue recognition under ASC 606. We recognize revenue pursuant to ASC 606 when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.
Operating Expenses Research and Development Expenses Research and development expenses represent costs incurred by us for the discovery, development, and manufacture of our product candidates and include: • external research and development expenses incurred under agreements with contract research organizations, contract manufacturing organizations, and consultants; • salaries, payroll taxes, employee benefits and stock-based compensation expenses for individuals involved in research and development efforts; • laboratory supplies; • costs related to compliance with regulatory requirements; • facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance and other operating costs; and • milestone expenses associated with our right of reference and license agreement with GSK.
Operating Expenses Research and Development Expenses Research and development expenses represent costs incurred by us for the discovery, development, and manufacture of our product candidates and include: • external research and development expenses incurred under agreements with contract research organizations, contract manufacturing organizations, and consultants; • salaries, payroll taxes, employee benefits and stock-based compensation expenses for individuals involved in research and development efforts; • laboratory supplies; • costs related to compliance with regulatory requirements; and • facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance and other operating costs.
This is due to the numerous risks and uncertainties associated with developing our product candidates, including the uncertainty related to: • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we decide to pursue; • our ability to raise additional funds necessary to complete clinical development of and commercialize our product candidates; • our ability to maintain our current research and development programs and to establish new ones; • our ability to establish new licensing or collaboration arrangements; • the progress of the development efforts of parties with whom we may enter into collaboration arrangements; • the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; • the receipt and related terms of regulatory approvals from applicable regulatory authorities; • the availability of raw materials and active pharmaceutical ingredient, or API, for use in production of our product candidates; • our ability to establish and operate a manufacturing facility, or secure manufacturing supply through relationships with third parties; • our ability to consistently manufacture our product candidates in quantities sufficient for use in clinical trials; • our ability to obtain and maintain intellectual property protection and regulatory exclusivity, both in the United States and internationally; • our ability to maintain, enforce, defend and protect our rights in our intellectual property portfolio; • the commercialization of our product candidates, if and when approved; • our ability to obtain and maintain third-party coverage and adequate reimbursement for our product candidates, if approved; • the acceptance of our product candidates, if approved, by patients, the medical community and third-party payors; • competition with other products; and • a continued acceptable safety profile of our products following receipt of any regulatory approvals.
This is due to the numerous risks and uncertainties associated with developing our product candidates, including the uncertainty related to: • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we decide to pursue; • our ability to raise additional funds necessary to complete clinical development of and, if applicable, commercialize our product candidates if and when approved; • our ability to maintain our current research and development programs and to establish new ones; • our ability to establish new licensing or collaboration arrangements; • the progress of the development efforts of parties with whom we may enter into collaboration arrangements; • the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; • the receipt and related terms of regulatory approvals from applicable regulatory authorities; • the availability of raw materials and active pharmaceutical ingredient, or API, for use in production of our product candidates; • our ability to establish and operate a manufacturing facility, or secure manufacturing supply through relationships with third parties; • our ability to consistently manufacture our product candidates in quantities sufficient for use in clinical trials; • our ability to obtain and maintain intellectual property protection and regulatory exclusivity, both in the United States and internationally (including defending and enforcing our rights); • our ability to obtain and maintain third-party coverage and adequate reimbursement for our product candidates, if approved; • the acceptance of our product candidates, if approved, by patients, the medical community and third-party payors; • competition with other products; and • a continued acceptable safety profile of our products following receipt of any regulatory approvals. 83 A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs and timing associated with the development of that product candidate, and potentially other candidates.
Although we commenced enrollment in the 12 mg dose cohort, in February 2023 the FDA placed a full clinical hold on the IND application for pociredir for SCD, which was lifted in August 2023.
Although we commenced enrollment in the 12 mg dose cohort, in February 2023 the FDA placed a full clinical hold on the investigational new drug, or IND, application for pociredir for SCD, which was lifted in August 2023.
We believe that our existing cash, cash equivalents, and marketable securities as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
We believe that our existing cash, cash equivalents, and marketable securities as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements into at least 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations. As of December 31, 2023, we had $236.2 million in cash, cash equivalents, and marketable securities.
If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations. As of December 31, 2024, we had $241.0 million in cash, cash equivalents, and marketable securities.
As of December 31, 2023, we recorded unbilled accounts receivable of $0.5 million related to reimbursable research and development costs under the MyoKardia collaboration agreement for activities performed during the three months ended December 31, 2023. In the future, we may generate revenue from milestones and royalty payments under the MyoKardia collaboration agreement.
As of December 31, 2024, we recorded no unbilled accounts receivable related to reimbursable research and development costs under the MyoKardia collaboration agreement for activities performed during the three months ended December 31, 2024. In the future, we may generate revenue from milestones and royalty payments under the MyoKardia collaboration agreement.
We recognize compensation expense for these awards over the requisite service period, which is generally the vesting period of the respective award. Generally, we issue awards with only service-based vesting conditions and record the expense for these awards using the straight-line method.
We recognize compensation expense for these awards over the requisite service period, which is generally the vesting period of the respective award. Generally, we issue awards with only service-based vesting conditions and record the expense for these awards using the straight-line method. We have also granted certain stock-based awards with performance-based vesting conditions.
We do not track our internal research and development expenses on a program-by-program basis as the resources are deployed across multiple projects. The following table summarizes our external research and development expenses by program following nomination as a development candidate for the years ended December 31, 2023 and 2022.
We do not track our internal research and development expenses on a program-by-program basis as the resources are deployed across multiple projects. The following table summarizes our external research and development expenses by program for the years ended December 31, 2024 and 2023. Pre-development candidate expenses, unallocated expenses and internal research and development expenses are classified separately.
We expect to report topline data from REACH in the fourth quarter of 2024. In January 2023, we announced interim data from our Phase 1b clinical trial of pociredir in SCD. We completed enrollment in the 6 mg and 2 mg dose cohorts, and we do not plan to enroll additional subjects in these cohorts.
In January 2023, we announced interim data from our Phase 1b clinical trial of pociredir in SCD. We completed enrollment in the 6 mg and 2 mg dose cohorts, and do not plan to enroll additional subjects in these cohorts.
The royalties are payable on a product-by-product basis during a specified royalty term, and may be reduced in specified circumstances. For the years ended December 31, 2023 and 2022 we recognized $2.8 million and $5.3 million, respectively, of collaboration revenue under the MyoKardia collaboration agreement.
The royalties are payable on a product-by-product basis during a specified royalty term, and may be reduced in specified circumstances. For the year ended December 31, 2024 we recognized no collaboration revenue under the MyoKardia collaboration agreement. For the year ended December 31, 2023 we recognized $2.8 million of collaboration revenue under the MyoKardia collaboration agreement.
As of December 31, 2023, we have funded our operations primarily with aggregate gross proceeds of $712.5 million from the sale of shares of our capital stock and from upfront payments received under our collaboration and license agreements. As of December 31, 2023, we had cash, cash equivalents, and marketable securities of $236.2 million.
As of December 31, 2024, we have funded our operations primarily with aggregate gross proceeds of $792.5 million from the sale of shares of our capital stock and from upfront payments received under our collaboration and license agreements. As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $241.0 million.
We expect our expenses and operating losses will increase substantially over the next several years in connection with our ongoing activities, as we: • continue our clinical development of losmapimod and pociredir; • continue our ongoing preclinical studies; • advance clinical-stage product candidates into later stage trials such as REACH, the Phase 3 clinical trial of losmapimod for the treatment of FSHD; • pursue the discovery of drug targets for other genetically-defined rare diseases and the subsequent development of any resulting product candidates, including for Diamond Blackfan Anemia under our recent license agreement with CAMP4; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • scale up our manufacturing processes and capabilities, or arrange for a third party to do so on our behalf, to support our clinical trials of our product candidates and commercialization of any of our product candidates for which we obtain marketing approval; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval; • acquire or in-license products, product candidates, technologies and/or data referencing rights, such as our recent agreement with CAMP4; • make any milestone payments to affiliates of GSK under our right of reference and license agreement with GSK upon the achievement of specified clinical or regulatory milestones, or to CAMP4 under our license agreement with CAMP4; • maintain, expand, enforce, defend and protect our intellectual property; • hire additional clinical, quality control and scientific personnel; and • add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and our operations as a public company.
We expect our expenses and operating losses will increase substantially over the next several years in connection with our ongoing activities, as we: • continue our clinical development of pociredir; • continue our ongoing preclinical studies; • advance clinical-stage product candidates into later stage trials; 80 • pursue the discovery of drug targets for other genetically-defined rare diseases and the subsequent development of any resulting product candidates, including for the potential treatment of inherited aplastic anemias, such as DBA, Shwachman-Diamond syndrome, and Fanconi anemia under our license agreement with CAMP4; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • scale up our manufacturing processes and capabilities, or arrange for a third party to do so on our behalf, to support our clinical trials of our product candidates and commercialization of any of our product candidates for which we obtain marketing approval; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval and that we have not out-licensed; • acquire or in-license products, product candidates, technologies and/or data referencing rights, such as our agreement with CAMP4; • make any milestone payments to CAMP4 under our license agreement; • maintain, expand, enforce, defend and protect our intellectual property; • hire additional clinical, quality control and scientific personnel; and • add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and our operations as a public company.
Overview We are a clinical-stage biopharmaceutical company focused on developing small molecules to improve the lives of patients with genetically defined rare diseases in areas of high unmet medical need. Our most advanced clinical-stage product candidate, losmapimod, is being developed for the potential treatment of FSHD.
Overview We are a clinical-stage biopharmaceutical company focused on developing small molecules to improve the lives of patients with genetically defined rare diseases in areas of high unmet medical need. Our clinical-stage product candidate, pociredir, is being developed for the potential treatment of sickle cell disease, or SCD.
Net Cash (Used in) Provided by Investing Activities Net cash used in investing activities was $36.7 million during the year ended December 31, 2023 compared to net cash provided by investing activities of $12.4 million during the year ended December 31, 2022.
Net Cash Provided by (Used in) Investing Activities Net cash provided by investing activities was $32.2 million during the year ended December 31, 2024 compared to net cash used in investing activities of $36.7 million during the year ended December 31, 2023.
In July 2020, we entered into a collaboration and license agreement with MyoKardia, which we amended in April 2023, pursuant to which we granted to MyoKardia an exclusive worldwide license under certain intellectual property rights to research, develop, make, have made, use, have used, sell, have sold, offer for sale, have offered for sale, import, have imported, export, have exported, distribute, have distributed, market, have marketed, promote, have promoted, or otherwise exploit products directed against certain biological targets identified by us that are capable of modulating up to a certain number of genes of interest with relevance to certain genetically defined cardiomyopathies.
As a result of the suspension of future development of losmapimod, and Sanofi’s recent notification of termination for convenience, we do not expect to recognize additional revenues under the Sanofi collaboration agreement. 81 In July 2020, we entered into a collaboration and license agreement with MyoKardia, which we amended in April 2023 and again in July 2024, pursuant to which we granted to MyoKardia an exclusive worldwide license under certain intellectual property rights to research, develop, make, have made, use, have used, sell, have sold, offer for sale, have offered for sale, import, have imported, export, have exported, distribute, have distributed, market, have marketed, promote, have promoted, or otherwise exploit products directed against certain biological targets identified by us that are capable of modulating up to a certain number of genes of interest with relevance to certain genetically defined cardiomyopathies.
The increase in net cash used in investing activities of $49.1 million was primarily due to net purchases of marketable securities during the year ended December 31, 2023, as compared to net maturities of marketable securities during the year ended December 31, 2022.
The increase in net cash provided by investing activities of $68.9 million was primarily due to net maturities of marketable securities during the year ended December 31, 2024, as compared to net purchases of marketable securities during the year ended December 31, 2023.
As of December 31, 2023, we had received $7.2 million of cost reimbursement payments and $2.5 million of milestone payments under the MyoKardia collaboration agreement.
As of December 31, 2024 and December 31, 2023, we have recorded no deferred revenue associated with the MyoKardia collaboration agreement. As of December 31, 2024, we had received $7.7 million of cost reimbursement payments and $2.5 million of milestone payments under the MyoKardia collaboration agreement.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $118.1 million during the year ended December 31, 2023 compared to net cash provided by financing activities of $84.3 million during the year ended December 31, 2022.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $2.7 million during the year ended December 31, 2024 compared to $118.1 million during the year ended December 31, 2023.
Funding Requirements We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we continue the research and development of, initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, we expect to incur additional costs to support the growth of our organization.
Funding Requirements We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we continue the research and development of, initiate clinical trials of, and seek marketing approval for, our product candidates, some of which are in the discovery stage of development.
Year Ended December 31, (in thousands) 2023 2022 Losmapimod external expenses $ 29,069 $ 26,260 Pociredir external expenses 7,442 15,133 Pre-development candidate expenses and unallocated expenses 14,536 14,964 Internal research and development expenses 20,754 20,425 Total research and development expenses $ 71,801 $ 76,782 The successful development of our product candidates is highly uncertain.
Year Ended December 31, (in thousands) 2024 2023 Losmapimod external expenses $ 20,801 $ 29,069 Pociredir external expenses 8,577 7,442 Pre-development candidate expenses and unallocated expenses 14,008 14,536 Internal research and development expenses 20,000 20,754 Total research and development expenses $ 63,386 $ 71,801 The successful development of our product candidates is highly uncertain.
These increases will likely include increased costs related to the hiring of additional personnel, legal, audit, filing fees, and general compliance and consulting expenses, among other expenses. Other Income, Net Other income, net consists primarily of interest income related to our investments in cash equivalents and marketable securities.
These increases will likely include increased costs related to the hiring of additional personnel, legal, audit, filing fees, and general compliance and consulting expenses, among other expenses.
In addition to product candidate development, we have developed discovery approach that we employ to systematically identify and validate cellular drug targets that can potentially modulate gene expression to treat known root causes of genetically defined rare diseases.
In addition to our product candidates, we developed a discovery approach that we employ to systematically identify and validate cellular drug targets that can potentially modulate gene expression to treat known root causes of genetically defined rare diseases. Our discovery approach led to the identification of pociredir for SCD, as well as other drug candidates.
We have also granted certain stock-based awards with performance-based vesting conditions.We recognize compensation expense for awards with performance-based vesting conditions over the remaining service period using an accelerated attribution method when management determines that achievement of the performance condition is probable.
We recognize compensation expense for awards with performance-based vesting conditions over the remaining service period using an accelerated attribution method when management determines that achievement of the performance condition is probable. At each reporting date, we evaluate if the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions.
However, we do not believe that it is possible at this time to accurately project total program-specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.
There are numerous factors associated with obtaining regulatory approval and the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.
As of December 31, 2023, we had an accumulated deficit of $509.7 million.
As of December 31, 2024, we had an accumulated deficit of $519.4 million.
As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future. Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into 2026.
Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements into at least 2027.
Research and Development Expenses The following table summarizes our research and development expenses for the years ended December 31, 2023 and 2022: Year Ended December 31, Change (in thousands) 2023 2022 $ External research and development $ 41,179 $ 44,944 $ (3,765 ) Employee compensation 20,754 20,425 329 Laboratory supplies 3,501 4,242 (741 ) Facility costs 4,834 5,593 (759 ) Other 1,533 1,578 (45 ) Total research and development expenses $ 71,801 $ 76,782 $ (4,981 ) Research and development expense decreased by $5.0 million from $76.8 million for the year ended December 31, 2022 to $71.8 million for the year ended December 31, 2023.
Research and Development Expenses The following table summarizes our research and development expenses for the years ended December 31, 2024 and 2023: Year Ended December 31, Change (in thousands) 2024 2023 $ External research and development $ 36,327 $ 41,179 $ (4,852 ) Employee compensation 20,000 20,754 (754 ) Laboratory supplies 1,528 3,501 (1,973 ) Facility costs 4,483 4,834 (351 ) Other 1,048 1,533 (485 ) Total research and development expenses $ 63,386 $ 71,801 $ (8,415 ) Research and development expense decreased by $8.4 million from $71.8 million for the year ended December 31, 2023 to $63.4 million for the year ended December 31, 2024.
Cash Flows The following table provides information regarding our cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, (in thousands) 2023 2022 Net cash used in operating activities $ (90,965 ) $ (97,050 ) Net cash (used in) provided by investing activities (36,692 ) 12,413 Net cash provided by financing activities 118,122 84,323 Net decrease in cash, cash equivalents, and restricted cash $ (9,535 ) $ (314 ) Net Cash Used in Operating Activities Net cash used in operating activities was $91.0 million during the year ended December 31, 2023 compared to net cash used in operating activities of $97.1 million during the year ended December 31, 2022.
As of December 31, 2024, we have not issued or sold any shares of common stock under the at-the-market offering program. 86 Cash Flows The following table provides information regarding our cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, (in thousands) 2024 2023 Net cash used in operating activities $ (2,218 ) $ (90,965 ) Net cash provided by (used in) investing activities 32,230 (36,692 ) Net cash provided by financing activities 2,746 118,122 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 32,758 $ (9,535 ) Net Cash Used in Operating Activities Net cash used in operating activities was $2.2 million during the year ended December 31, 2024 compared to $91.0 million during the year ended December 31, 2023.
Net cash provided by financing activities during the year ended December 31, 2022 primarily consisted of net proceeds of $80.8 million from the August 2022 completion of the public offering of our common stock.
Net cash provided by financing activities during the year ended December 31, 2024 consisted of net proceeds of $2.7 million from the issuance of common stock under our benefit plans.
The Phase 1b clinical trial is being re-initiated at the 12 mg once daily dose level, with that cohort expected to enroll approximately 10 patients, and will be followed by an additional cohort of approximately 10 patients at the 20 mg once daily dose level.
We reinitiated the Phase 1b clinical trial at the 12 mg once daily dose level in the fourth quarter of 2023, with that cohort expected to enroll approximately 10 subjects, to be followed by an additional cohort of approximately 10 subjects at the 20 mg once daily dose level. Subjects are evaluated over a 12-week treatment period.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the most significant areas involving management’s judgments and estimates. See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a description of our other significant accounting policies.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the most significant areas involving management’s judgments and estimates.
The decrease in general and administrative expenses was primarily attributable to the following: • $2.3 million in decreased professional services costs, primarily due to decreased consulting and insurance costs; • partially offset by $1.3 million of increased employee compensation costs, including a $1.4 million increase in stock-based compensation expense; • $0.3 million in increased facility-related costs, including increased costs associated with our leases as well as depreciation and other utility and maintenance costs; and • $0.6 million in increased other costs.
The decrease in general and administrative expenses was primarily attributable to the following: • $5.1 million of decreased employee compensation costs due to decreased headcount, including a $1.1 million decrease in stock-based compensation expense; • $1.0 million of decreased facility costs primarily as a result of the expiration of our lease agreement for office space at 125 Sidney Street; and • $0.1 million in decreased other costs; • partially offset by $1.0 million in increased professional services costs, primarily due to increased legal and commercial costs.
Under the terms of the MyoKardia collaboration agreement, we received a $10.0 million upfront payment and a $2.5 million payment as prepaid research funding in July 2020. MyoKardia will also reimburse us for the costs of the research activities not covered by the prepaid research funding, up to a maximum amount of total research funding (including the prepaid research funding).
We satisfied our obligation to perform research services as of December 31, 2023. Under the terms of the MyoKardia collaboration agreement, we received a $10.0 million upfront payment and a $2.5 million payment as prepaid research funding in July 2020.
Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following summarizes our results of operations for the years ended December 31, 2023 and 2022, along with the changes in those items in dollars: Year Ended December 31, Change (in thousands) 2023 2022 $ Collaboration revenue $ 2,805 $ 6,342 $ (3,537 ) Operating expenses: Research and development 71,801 76,782 (4,981 ) General and administrative 41,668 41,694 (26 ) Restructuring expenses — 427 (427 ) Total operating expenses 113,469 118,903 (5,434 ) Loss from operations (110,664 ) (112,561 ) 1,897 Other income, net 13,329 2,690 10,639 Net loss $ (97,335 ) $ (109,871 ) $ 12,536 Collaboration Revenue Collaboration revenue decreased by $3.5 million from $6.3 million for the year ended December 31, 2022 to $2.8 million for the year ended December 31, 2023.
Other Income, Net Other income, net consists primarily of interest income related to our investments in cash equivalents and marketable securities. 84 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following summarizes our results of operations for the years ended December 31, 2024 and 2023, along with the changes in those items in dollars: Year Ended December 31, Change (in thousands) 2024 2023 $ Collaboration revenue $ 80,000 $ 2,805 $ 77,195 Operating expenses: Research and development 63,386 71,801 (8,415 ) General and administrative 36,448 41,668 (5,220 ) Restructuring expense 2,063 — 2,063 Total operating expenses 101,897 113,469 (11,572 ) Loss from operations (21,897 ) (110,664 ) 88,767 Other income, net 12,172 13,329 (1,157 ) Net income (loss) $ (9,725 ) $ (97,335 ) $ 87,610 Collaboration Revenue Collaboration revenue increased by $77.2 million from $2.8 million for the year ended December 31, 2023 to $80.0 million for the year ended December 31, 2024.
At each reporting date, we evaluate if the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions. We determine the fair value of restricted stock awards and restricted stock units based on the estimated fair value of our common stock on the date of grant, less any applicable purchase price.
We determine the fair value of restricted stock awards and restricted stock units based on the estimated fair value of our common stock on the date of grant, less any applicable purchase price. We estimate the fair value of stock options granted using the Black-Scholes option-pricing model.
Other Income, Net Other income, net increased by $10.6 million from $2.7 million for the year ended December 31, 2022 to $13.3 million for the year ended December 31, 2023.
Other Income, Net Other income, net decreased by $1.1 million from $13.3 million for the year ended December 31, 2023 to $12.2 million for the year ended December 31, 2024. The decrease in other income, net was primarily attributable to a decrease in our average cash, cash equivalents, and marketable securities balance.
To date, we have funded our operations primarily from the sale of shares of our capital stock and from upfront payments received under our collaboration and license agreements. In January 2023, we issued and sold 9,615,384 shares of our common stock in a public offering at a public offering price of $13.00 per share, less underwriting discounts and commissions.
To date, we have funded our operations primarily from the sale of shares of our capital stock and from upfront payments received under our collaboration and license agreements. We have incurred significant operating losses since our inception and we expect to continue to incur significant operating losses for the foreseeable future.
We may never succeed in obtaining regulatory approval for any of our product candidates. In December 2019, we entered into a collaboration and license agreement with Acceleron to identify biological targets to modulate specific pathways associated with a targeted indication within the pulmonary disease space.
We may never succeed in obtaining regulatory approval for any of our product candidates. In May 2024, we entered into a collaboration and license agreement with Sanofi, pursuant to which we granted Sanofi an exclusive license under certain intellectual property rights to commercialize losmapimod, an oral small molecule for the treatment of FSHD outside of the United States.
A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs and timing associated with the development of that product candidate, and potentially other candidates. Research and development activities account for a significant portion of our operating expenses.
Research and development activities account for a significant portion of our operating expenses.
Removed
Our other clinical product candidate is pociredir, which is being developed for the potential treatment of SCD. We initiated REACH, a randomized, double-blind, placebo-controlled, multi-national Phase 3 clinical trial of losmapimod in the second quarter of 2022 and we completed enrollment during September 2023. The trial enrolled 260 patients.
Added
We have enrolled 10 patients in the 12 mg dose cohort, and we expect to provide clinical data from the 12 mg dose cohort in mid-2025 and from the 20 mg dose cohort by the end of 2025. In September 2024, we announced topline results from our Phase 3 REACH clinical trial of losmapimod in facioscapulohumeral muscular dystrophy, or FSHD.
Removed
Our discovery approach led to the identification of both losmapimod for FSHD and pociredir for SCD, as well as a robust discovery pipeline.
Added
The Phase 3 REACH trial did not achieve its primary endpoint of change from baseline in relative surface area with losmapimod compared to placebo. In addition, secondary endpoints did not achieve nominal statistical significance. The safety and tolerability profile of losmapimod was consistent with previously reported studies. We plan to share the results at an upcoming medical meeting.
Removed
With our priorities focused on the development and potential commercialization of our two clinical-stage assets, losmapimod and pociredir, and ongoing work on our preclinical programs in hematology and muscle diseases, we are realigning our strategy and resources accordingly and will be winding down certain exploratory activities from our discovery efforts.
Added
Based on the results of the REACH trial, we have suspended future development of losmapimod.
Removed
The net proceeds of the offering were $117.3 million, after deducting underwriting discounts and commissions and offering expenses. We have incurred significant operating losses since our inception and we expect to continue to incur significant operating losses for the foreseeable future.
Added
In September 2024, we also announced a strategic plan to reprioritize research and development activities and are now focused on advancing pociredir for the treatment of SCD, novel therapeutic agents for the potential treatment of inherited aplastic anemias, such as DBA, Shwachman-Diamond syndrome, and Fanconi anemia, and our other discovery programs.
Removed
The agreement terminated effective October 1, 2022, following notification from Acceleron in June 2022 of its decision to terminate the agreement for convenience. For the years ended December 31, 2023 and 2022, we recognized zero and $1.0 million, respectively of collaboration revenue under the Acceleron collaboration agreement.
Added
The plan reduced our workforce from 80 to 51 full-time employees, including a reduction of positions across both research and development and general and administrative functions. We estimate that this restructuring will result in annual operating expense savings of approximately $10.0 million beginning in the first quarter of 2025.
Removed
As of December 31, 2023, we have recorded no deferred revenue associated with the MyoKardia collaboration agreement.
Added
We continue to advance our program for the potential treatment of inherited aplastic anemias, such as DBA, Shwachman-Diamond syndrome, and Fanconi anemia, and we plan to submit an IND for DBA during the fourth quarter of 2025.
Removed
As of December 31, 2022 we have recorded $0.9 million of deferred revenue associated with the MyoKardia collaboration agreement, which is classified as either current or noncurrent, net of current portion in our consolidated balance sheets based on the period over which the revenue is expected to be recognized.
Added
During the year ended December 31, 2024, we recognized $80.0 million of revenue associated with the upfront license payment. During the year ended December 31, 2024, we recorded a $8.1 million reduction in research and development expenses in connection with global development activities for losmapimod.
Removed
Pre-development candidate expenses, unallocated expenses and internal research and development expenses are classified separately. Losmapimod external expenses during the year ended December 31, 2022 includes a $5.0 million milestone achieved under our right of reference and license agreement with GSK upon initiation of the REACH trial during the second quarter of 2022.
Added
During the year ended December 31, 2024, we recognized no revenue associated with the Sanofi territory-specific manufacturing activities for losmapimod.
Removed
We recognize revenue under collaboration agreements based on our pattern of performance related to the respective identified performance obligation, which is the period over which we will perform research services under the respective agreement.
Added
MyoKardia agreed to reimburse us for the costs of the research activities not covered by the prepaid research funding, up to a maximum amount of total research funding (including the prepaid research funding).
Removed
For the years ended December 31, 2023 and 2022, we recognized zero and $1.0 million, respectively, of collaboration revenue under the Acceleron collaboration agreement, which terminated in October 2022, and $2.8 million and $5.3 million of collaboration revenue, respectively, under the MyoKardia collaboration agreement.
Added
Payments to or reimbursements from Sanofi related to global development activities are accounted for as an increase to or reduction of losmapimod external expenses.
Removed
General and Administrative Expenses The following table summarizes our general and administrative expenses for the years ended December 31, 2023 and 2022: Year Ended December 31, Change (in thousands) 2023 2022 $ Employee compensation $ 24,809 $ 23,488 $ 1,321 Professional services 11,023 13,278 (2,255 ) Facility costs 2,516 2,206 310 Other 3,320 2,722 598 Total general and administrative expenses $ 41,668 $ 41,694 $ (26 ) General and administrative expenses decreased by less than $0.1 million from $41.7 million for the year ended December 31, 2022 to $41.7 million for the year ended December 31, 2023.
Added
However, we do not believe that it is possible at this time to accurately project total program-specific expenses through approval and commercialization.
Removed
The increase in other income, net was primarily attributable to an increased rate of return on our cash, cash equivalents, and marketable securities and an increase in our average cash, cash equivalents, and marketable securities balance.
Added
Restructuring Expenses In September 2024, we announced a plan to reprioritize research and development activities to focus on advancing pociredir for the treatment of SCD, novel therapeutic agents for the treatment of inherited aplastic anemias, such as DBA, Shwachman-Diamond syndrome, and Fanconi anemia, and our other discovery programs.
Removed
In January 2023, we completed a public offering of our common stock and issued and sold 9,615,384 shares of common stock at a public offering price of $13.00 per share, resulting in net proceeds of $117.3 million after deducting underwriting discounts and commissions and offering expenses.
Added
The plan reduced our workforce from 80 to 51 full-time employees, including a reduction of positions across both research and development and general and administrative functions.
Removed
The decrease in net cash used in operating activities of $6.1 million was primarily due to a decrease in net loss, including as a result of decreased external research and development costs as a result of the clinical hold for pociredir, which was lifted in August 2023, and increased interest income.
Added
The increase was primarily attributable to the recognition of $80.0 million of revenue associated with the upfront license payment received during the year ended December 31, 2024 under the Sanofi collaboration agreement.
Removed
Revenue Recognition We account for revenue recognition under the Financial Accounting Standards Board Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers .
Added
In February 2024, we entered into a controlled equity offering sm agreement with Cantor Fitzgerald & Co. and Stifel, Nicolaus & Company, Incorporated, as agents, with respect to an at-the-market offering program pursuant to which we may offer and sell, from time to time in our sole discretion, shares of our common stock, par value $0.001 per share, having an aggregate offering price of up to $100.0 million through the agents.
Removed
For further description of our revenue recognition policy, see Note 2 “Summary of Significant Accounting Policies—Revenue Recognition” to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Added
The decrease in net cash used in operating activities of $88.8 million was primarily due to the receipt of the $80.0 million upfront license payment during the year ended December 31, 2024 under the Sanofi collaboration agreement.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2023 and 2022.
Biggest changeInflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2024 and 2023.
We contract with vendors that are located outside of the United States and certain invoices are denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with these arrangements. We do not currently hedge our foreign currency exchange rate risk. As of December 31, 2023, we had minimal or no liabilities denominated in foreign currencies.
We contract with vendors that are located outside of the United States and certain invoices are denominated in foreign currencies. We are subject to fluctuations in foreign currency rates in connection with these arrangements. We do not currently hedge our foreign currency exchange rate risk. As of December 31, 2024, we had minimal or no liabilities denominated in foreign currencies.
Treasury securities and our investments are in short-term marketable securities, such as corporate bonds and commercial paper. As of December 31, 2023, we had cash, cash equivalents, and marketable securities of $236.2 million.
Treasury securities and our investments are in short-term marketable securities, such as corporate bonds and commercial paper. As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $241.0 million.

Other FULC 10-K year-over-year comparisons