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

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

+383 added−356 removedSource: 10-K (2024-03-05) vs 10-K (2023-03-22)

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

383 paragraphs added · 356 removed · 242 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

62 edited+28 added−43 removed74 unchanged
Biggest changeFurthermore, we have four granted European patents, one expiring in 2031, another in 2032, a third one in 2034, and a fourth one in 2037, each of them validated in multiple countries; seven granted Japanese patents, one expiring in 2031, three others in 2034, and three expiring in 2037; five granted Chinese patents, two expiring in 9 2031, another one in 2032, and two more in 2034; and forty issued patents in other foreign jurisdictions, twelve of them expiring in 2031, two expiring in 2032, ten expiring in 2034, and sixteen expiring in 2037.
Biggest changeFurthermore, we have eight granted European patents, one expiring in 2031, another one in 2032, a third one in 2034, a fourth one in 2036, a fifth to seventh ones in 2037, and the eighth one in 2039, each of them validated in multiple countries or registered in multiple countries as an European Unitary Patent; nine granted Japanese patents, one expiring in 2031, another in 2034, two in 2036, four others in 2037 and one in 2039; seven granted Chinese patents, two expiring in 2031, one in 2032, three in 2034, and one expiring in 2037; and a large number of 8 issued patents in foreign jurisdictions expiring between 2031 and 2039.
The process required by the FDA before a drug may be approved and marketed in the United States generally involves the following: • completion of extensive nonclinical laboratory and animal studies conducted in accordance with applicable regulations, including Good Laboratory Practices, or GLP, regulations and applicable requirements for the humane use of laboratory animals; • submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials may commence; • approval by an independent IRB to proceed with initiating the clinical trial at each corresponding investigational site. • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, GCPs and other clinical-trial related regulations to establish the safety and efficacy of the product for each proposed indication; • preparation and submission to the FDA of an NDA; • satisfactory completion of one or more FDA inspections such as pre-approval inspection(s) of the manufacturing facility or facilities at which the product, or components thereof, are made to assess compliance with current GMP; • payment of user fees for FDA review of the NDA; and • FDA acceptance, review and approval of the NDA, which may include an Advisory Committee review.
The process required by the FDA before a drug may be approved and marketed in the United States generally involves the following: • completion of extensive nonclinical laboratory and animal studies conducted in accordance with applicable regulations, including Good Laboratory Practices, or GLP, regulations and applicable requirements for the humane use of laboratory animals; • submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials may commence; • approval by an independent IRB to proceed with initiating the clinical trial at each corresponding investigational site. 10 • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, GCPs and other clinical-trial related regulations to establish the safety and efficacy of the product for each proposed indication; • preparation and submission to the FDA of an NDA; • satisfactory completion of one or more FDA inspections such as pre-approval inspection(s) of the manufacturing facility or facilities at which the product, or components thereof, are made to assess compliance with current GMP; • payment of user fees for FDA review of the NDA; and • FDA acceptance, review and approval of the NDA, which may include an Advisory Committee review.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain current GMP compliance. Once an approval is granted, the FDA may issue enforcement letters or withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain current GMP compliance. 14 Once an approval is granted, the FDA may issue enforcement letters or withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
Where the MAA includes the results of all pediatric studies conducted in accordance with the PIP and the results are reflected in the approved summary of product characteristics, the holder of a patent or supplementary protection certificate is entitled to receive a six-month extension of the protection under a supplementary protection certificate or, in the case of orphan medicinal products, the product is eligible for a two-year extension of the orphan market exclusivity.
Where the MAA includes the results of all pediatric studies conducted in accordance with the PIP and the results are reflected in the approved summary of product characteristics, the holder of a patent or supplementary protection certificate is entitled to receive a six-month extension of the protection under a supplementary protection certificate or, in the case of orphan medicinal products, the product is eligible for a two-year extension of the orphan 15 market exclusivity.
Phase 3 clinical trials generally involve a larger number of participants at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use, to establish the overall benefit/risk profile of the product and to provide an adequate basis for product approval by the FDA. • Phase 4.
Phase 3 clinical trials generally involve a larger number of participants at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use, to establish the overall benefit/risk profile of the product and to provide an adequate basis for product approval by the FDA. 11 • Phase 4.
Additionally, all promotional material must be truthful and non-misleading, and present balanced information regarding the risks and benefits of the drug product. 15 Other Regulatory Requirements Outside the U.S., our abilities to develop and market a product are contingent upon receiving approval and ultimately marketing authorization from the appropriate regulatory authorities.
Additionally, all promotional material must be truthful and non-misleading, and present balanced information regarding the risks and benefits of the drug product. Other Regulatory Requirements Outside the U.S., our abilities to develop and market a product are contingent upon receiving approval and ultimately marketing authorization from the appropriate regulatory authorities.
For a drug for which FDA approval is the first permitted marketing of the active ingredient, the Hatch-Waxman Act allows for extension of the term of one U.S. patent that includes at least one claim covering the composition of matter of an FDA-approved drug (drug substance or drug product), an FDA-approved method of treatment using the drug and/or a method of manufacturing the FDA-approved drug.
For a drug for which FDA approval is the first permitted marketing of the active ingredient, the Hatch-Waxman Act allows for extension of the term of one U.S. patent that includes at least one claim covering the composition of matter of an FDA-approved drug (drug substance or drug product), an FDA-approved method of treatment using the drug and/or a method of manufacturing the 9 FDA-approved drug.
The sponsor must submit the results of the nonclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical study protocol, to the FDA as part of an IND, which must become effective before clinical trials in 11 a given indication may be commenced.
The sponsor must submit the results of the nonclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical study protocol, to the FDA as part of an IND, which must become effective before clinical trials in a given indication may be commenced.
Pediatric Exclusivity Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing 14 regulatory exclusivity for both drugs and biologics, and also unexpired Orange Book listed patents in the case of drugs.
Pediatric Exclusivity Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity for both drugs and biologics, and also unexpired Orange Book listed patents in the case of drugs.
On the basis of the FDA's evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, FDA will issue either an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug and is accompanied by specific prescribing information for specific conditions of use.
On the basis of the FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, FDA will issue either an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug and is accompanied by specific prescribing 12 information for specific conditions of use.
An application may be eligible for "accelerated approval" where the product candidate is intended to treat a serious or life-threatening illness and provides meaningful therapeutic benefit over existing treatments; applications eligible for accelerated approval may be approved on the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
An application may be eligible for “accelerated approval” where the product candidate is intended to treat a serious or life-threatening illness and provides meaningful therapeutic benefit over existing treatments; applications eligible for accelerated approval may be approved on the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
To the extent that our commercial partners, collaborators, employees and consultants use intellectual 10 property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
We are not aware of any efforts to develop sGC modulators for treatment of CNS diseases. Manufacturing We do not own or operate, and currently have no plans to establish, any manufacturing facilities.
We are not aware of any efforts to develop sGC modulators for treatment of CNS diseases. 16 Manufacturing We do not own or operate, and currently have no plans to establish, any manufacturing facilities.
Intellectual Property We vigorously protect the intellectual property and proprietary technology that we believe is important to our business, including by pursuing and maintaining U.S. and foreign patents that cover our product candidates and compositions, their methods of use and the processes for their preparation, as well as any other relevant inventions and improvements that are commercially important to the development of our business.
Intellectual Property We protect the intellectual property and proprietary technology that we believe is important to our business, including by pursuing and maintaining U.S. and foreign patents that cover our product candidates and compositions, 7 their methods of use and the processes for their preparation, as well as any other relevant inventions and improvements that are commercially important to the development of our business.
The IRB will consider, among other things, ethical factors, the safety of human subjects and the possible liability of the institution. The IRB also approves the informed consent form, including a privacy statement, that must be provided to each clinical trial participant or his or her legal representative, and must monitor the clinical trial until completed.
The IRB will consider, among other things, ethical factors, the safety of human subjects and the possible liability of the institution. The IRB also approves the informed consent form, including a privacy statement, which must be provided to each clinical trial participant or his or her legal representative, and must monitor the clinical trial until completed.
The SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov.
The SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov. 17
The technology underlying our sGC patents and pending patent applications has been developed by us and was not acquired from any in-licensing agreement. We own all of the issued patents and pending applications. The intellectual property portfolios for our most advanced product candidates are summarized below.
The technology underlying our sGC patents and pending patent applications has been developed by us and was not acquired from any in-licensing agreement. We own all of the issued patents and pending applications. The intellectual property portfolios for our most advanced product candidates (praliciguat and olinciguat) are summarized below.
Generally, if a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same active moiety for the same indication for seven years from the date of such approval, except in limited circumstances.
Generally, if a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same active component parts for the same indication for seven years from the date of such approval, except in limited circumstances.
A fourth U.S. patent, US 10,183,021 will expire in 2034 and is directed to the treatment of resistant hypertension with praliciguat or combinations of praliciguat and known anti-hypertensives. A fifth U.S. patent, US 209,639,308 will expire in 2034 8 and is directed to the treatment of diabetic nephropathy with praliciguat or combinations of praliciguat with other agents.
A fifth U.S. patent, US 10,183,021 will expire in 2034 and is directed to the treatment of resistant hypertension with praliciguat or combinations of praliciguat and known anti-hypertensives. A sixth U.S. patent, US 209,639,308 will expire in 2034 and is directed to the treatment of diabetic nephropathy with praliciguat or combinations of praliciguat with other agents.
The sixth U.S. patent, US 10,927,136 covers phosphorus prodrugs of praliciguat and will expire in 2037. The seventh U.S. Patent, US 11,389,449, is directed to the treatment of metabolic syndrome with praliciguat and will expire in 2038. The eighth U.S. Patent, US 11,357,777, is directed to the treatment of NASH with praliciguat and other compounds and will expire in 2037.
The seventh U.S. patent, US 10,927,136 covers phosphorus prodrugs of praliciguat and will expire in 2037. The eighth U.S. Patent, US 11,389,449, is directed to the treatment of metabolic syndrome with praliciguat and will expire in 2038. The ninth U.S. Patent, US 11,357,777, is directed to the treatment of NASH with praliciguat and other compounds and will expire in 2039.
We provide robust compensation and benefits programs which include competitive salaries, potential annual discretionary bonuses, stock awards, a 401(k) plan with employer match, healthcare and insurance benefits, health savings and flexible spending accounts, unlimited vacation time, among other benefits.
We plan to provide compensation and benefits programs which may include competitive salaries, potential annual discretionary bonuses, stock awards, a 401(k) plan with employer match, healthcare and insurance benefits, health savings and flexible spending accounts, unlimited vacation time, among other benefits.
We intend to continue to rely on CMOs for the supply of zagociguat and CY3018 for all stages of clinical development and commercialization, as well as for the supply of any other product candidates that we may identify. We require all our CMOs to conduct manufacturing activities in compliance with current GMP requirements.
We intend to continue to rely on CMOs for the supply of our retained assets for all stages of clinical development and commercialization, as well as for the supply of any other product candidates that we may identify. We require all our CMOs to conduct manufacturing activities in compliance with current GMP requirements.
Praliciguat Patent Portfolio Our praliciguat patent portfolio includes ten U.S. issued patents, eight pending U.S. patent applications, and numerous patents and pending patent applications in foreign jurisdiction. One of the U.S. patents, US 9,481,689, which will expire in 2034, is directed to praliciguat and pharmaceutical compositions thereof.
Praliciguat Patent Portfolio Our praliciguat patent portfolio includes 13 U.S. issued patents, five pending U.S. patent applications, and numerous patents and pending patent applications in foreign jurisdiction. One of the U.S. patents, US 9,481,689, which will expire in 2034, is directed to praliciguat and pharmaceutical compositions thereof.
A product may be eligible for more than one expedited approval program. Even if a product qualifies for one or more of these programs, however, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
Even if a product qualifies for one or more of these programs, however, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
Two other U.S. patents, US 8,748,442 and US 9,139,564, expire in 2031, and provide generic coverage of olinciguat and intermediates used in the preparation of olinciguat, respectively. Another U.S. patent, US 10,517,874, which will expire in 2034 is directed to the treatment of SCD using olinciguat alone or in combinations with other therapeutic agents.
Three other U.S. patents, US 8,748,442, US 9,139,564, and US 10,189,809, expire in 2031, and provide generic coverage of olinciguat, intermediates used in the preparation of olinciguat, and compounds related to olinciguat, respectively. Another U.S. patent, US 10,517,874, which will expire in 2034 is directed to the treatment of SCD using olinciguat alone or in combinations with other therapeutic agents.
An application may be eligible for a "fast track" designation for a product that is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need.
An application may be eligible for a “fast track” designation for a product that is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need.
Some of these patents may be eligible for patent term extension depending on the jurisdiction. We also have numerous patent applications pending in foreign jurisdictions. Olinciguat Patent Portfolio Our olinciguat patent portfolio includes nine U.S. issued patents, five pending U.S. patent applications, one PCT patent application and numerous patents and pending applications in foreign jurisdictions.
Some of these patents may be eligible for patent term extension depending on the jurisdiction. We also have numerous patent applications pending in foreign jurisdictions. Olinciguat Patent Portfolio Our olinciguat patent portfolio includes thirteen U.S. issued patents, five pending U.S. patent applications and numerous patents and pending applications in foreign jurisdictions.
Two additional U.S. patent applications that, if issued, will expire in 2037, and 2039, respectively, provide coverage for methods of large scale preparation of praliciguat. We also have a pending U.S. application directed to a praliciguat formulation, that, if issued, will expire in 2036.
Two pending U.S. patent applications that, if issued, will expire in 2031 and 2034, respectively, provide generic coverage for praliciguat. One additional U.S. patent application that, if issued, will expire in 2037 provides coverage for methods of large-scale preparation of praliciguat. We also have a pending U.S. application directed to a praliciguat formulation, that, if issued, will expire in 2036.
In addition, a sponsor can request designation of a product candidate as a "breakthrough therapy." A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
We depend on third-party contract manufacturing organizations, or CMOs, for all our requirements of raw materials, drug substance and drug product for our ongoing clinical trials and our nonclinical research.
We intend to depend on third-party contract manufacturing organizations, or CMOs, for all our requirements of raw materials, drug substance and drug products for clinical trials and nonclinical research.
The term of this U.S. patent may be eligible for patent term extension as described below. Two other U.S. patents, US 8,748,442 and US 9,139,564, expire in 2031, and provide generic coverage of praliciguat and intermediates used in the preparation of praliciguat, respectively.
The term of this U.S. patent may be eligible for patent term extension as described below. Three other U.S. patents, US 8,748,442, US 9,139,564, and 10,189,809, expire in 2031, and provide generic coverage of praliciguat and intermediates used in the preparation of praliciguat, as well as compounds related to praliciguat, respectively.
The PCT applications are filed under an international patent law treaty that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the 153 contracting states, followed by the process of entering national phase, which requires a separate application in each of the member states in which national patent protection is sought.
Patent families are filed either as utility U.S. patents or under an international patent law treaty (PCT) that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the 157 contracting states, followed by the process of entering national phase, which requires a separate application in each of the member states in which national patent protection is sought.
The remaining pending U.S. patent applications are directed to deuterated forms of olinciguat and processes and synthetic intermediates for preparing olinciguat and, if issued, will expire in 2040 and 2037, respectively. The PCT patent application is directed to the treatment of heart failure with preserved ejection fraction (HFpEF) in post-menopausal women with olinciguat and other sGC stimulators.
Two pending U.S. patent applications are directed to processes and synthetic intermediates for preparing olinciguat and, if issued, will expire in 2039 and 2037, respectively. A pending US application is directed to the treatment of heart failure with preserved ejection fraction (HFpEF) in post-menopausal women with olinciguat and other sGC stimulators. If issued, the corresponding patent will expire in 2042.
On June 3, 2021, we entered into a license agreement with Akebia relating to the exclusive worldwide license to Akebia of our rights to the development, manufacture, medical affairs, and commercialization of pharmaceutical products containing praliciguat and other related products and forms thereof enumerated in such agreement.
Akebia License Agreement On June 3, 2021, the Company and Akebia entered into a License Agreement (the “Akebia License Agreement”) relating to the exclusive worldwide license by the Company to Akebia of our rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing the pharmaceutical compound known as praliciguat and other related products and forms thereof enumerated in the License Agreement.
Fast track designation provides opportunities for more frequent interactions with the FDA review team and permits FDA to consider sections of the NDA on a rolling basis before the complete application is submitted.
Fast track designation provides opportunities for more frequent interactions with the FDA review team and permits FDA to consider sections of the NDA on a rolling basis before the complete application is submitted. In addition, a sponsor can request designation of a product candidate as a “breakthrough therapy”.
We also have numerous pending patent applications in foreign jurisdictions. Some of these patents may be eligible for patent term extension or the foreign jurisdiction equivalent, depending on the jurisdiction.
We also have numerous pending patent applications in foreign jurisdictions. Some of these patents may be eligible for patent term extension or the foreign jurisdiction equivalent, depending on the jurisdiction. Patent Term The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained.
Another of the U.S. pending applications is directed to methods of treating diabetic nephropathy with praliciguat, that if issued, will expire in 2040 or later. The remaining two pending U.S. applications are directed to prodrugs of praliciguat, and deuterated forms of praliciguat and, if issued, will expire in 2037 and 2040, respectively.
Another of the U.S. pending applications is directed to methods of treating diabetic nephropathy with praliciguat, and if issued, will expire in 2040 or later.
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.
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. We are currently not anticipating acquiring any assets for severe pediatric applications.
Our telephone number is (857) 327-8778. Our common stock is listed on the Nasdaq Capital Market under the symbol “CYCN.” Available Information Our internet website address is www.cyclerion.com. In addition to the information contained in this Annual Report, information about us can be found on our website.
Our common stock is listed on the Nasdaq Capital Market under the symbol “CYCN.” Available Information Our internet website address is www.cyclerion.com. In addition to the information contained in this Annual Report, information about us can be found on our website. Our website and information included in or linked to our website are not part of this Annual Report.
A fifth U.S. issued patent, US 10,889,577, will expire in 2037 and is directed to polymorphs of olinciguat. The sixth issued patent, US 11,207,323, will expire in 2034 and provides coverage for stereoisomers of olinciguat.
Two additional U.S. issued patents, US 10,889,577, and US 11,572,358, will expire in 2037 and are directed to polymorphs of olinciguat. The eighth issued patent, US 11,207,323, will expire in 2034 and provides coverage for stereoisomers of olinciguat.
Furthermore, we have four granted European patents, one expiring in 2031, another one in 2032, a third one in 2034, and a fourth one in 2037, each of them validated in multiple countries; five granted Japanese patents, one expiring in 2031, another in 2034, one in 2036 and two others in 2037; six granted Chinese patents, two expiring in 2031, one in 2032, two in 2034, and one expiring in 2037; and thirty-nine issued patents in other foreign jurisdictions, two expiring in 2032, twelve of them expiring in 2031, nine expiring in 2034, three expiring in 2036, and thirteen in 2037.
Furthermore, we have nine granted European patents, one expiring in 2031, another in 2032, two in 2034, four in 2037, and one in 2039, each of them validated in multiple countries or registered in multiple countries as Unitary European Patents; eight granted Japanese patents, one expiring in 2031, three others in 2034, three expiring in 2037 and one in 2039; six granted Chinese patents, two expiring in 2031, another one in 2032, two more in 2034 and one in 2037; and a large number of issued patents in other foreign jurisdictions, expiring between 2031 and 2039.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. 16 Competition can be viewed as through at least two lenses: 1) companies that are developing products with a different mechanism of action to address the same therapeutic need and 2) companies that are developing products that act through the same mechanism of action (i.e., sGC modulators).
Competition can be viewed as through at least two lenses: 1) companies that are developing products with a different mechanism of action to address the same therapeutic need and 2) companies that are developing products that act through the same mechanism of action (i.e., sGC modulators). Competition within target therapeutic areas .
However, we seek to build our portfolio with key differentiating attributes to provide a competitive advantage in the markets we target. The success of all of our product candidates, if approved, will likely depend upon their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.
The success of all of our product candidates, if approved, will likely depend upon their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.
There are many public and private biopharmaceutical companies, universities, government agencies and other research organizations actively engaged in the research and development of products that may be similar to our product candidates or address similar markets. In addition, the number of companies seeking to develop and commercialize products and therapies competing with our product candidates is likely to increase.
Competition The biopharmaceutical industry is highly competitive within and across therapeutic categories and indications. There are many public and private biopharmaceutical companies, universities, government agencies and other research organizations actively engaged in the research and development of products that may be similar to our product candidates or address similar markets.
The application must be accompanied by a significant user fee payment, which typically increases annually, although waivers may be granted in limited cases (e.g., for products that have received an Orphan Designation). 12 The FDA has substantial discretion in the approval process and may refuse to accept any application or decide that the data is insufficient for approval and may require additional nonclinical or clinical studies, or other information (e.g., product quality data or manufacturing controls) before it accepts the filing.
The FDA has substantial discretion in the approval process and may refuse to accept any application or decide that the data is insufficient for approval and may require additional nonclinical or clinical studies, or other information (e.g., product quality data or manufacturing controls) before it accepts the filing.
This may include waiver or deferral of pediatric studies. The Best Pharmaceuticals for Children Act (BPCA) also allows for agreement with FDA on a pediatric written request that, if fulfilled, may extend data exclusivity for the molecule for an additional 6 months. Competition The biopharmaceutical industry is highly competitive within and across therapeutic categories and indications.
This may include waiver or deferral of pediatric studies. The Best Pharmaceuticals for Children Act (BPCA) also allows for agreement with FDA on a pediatric written request that, if fulfilled, may extend data exclusivity for the molecule for an additional 6 months. We are currently not seeking to develop any new drug candidates for severe pediatric applications.
The following table presents the status of our portfolio of sGC stimulators: Cyclerion became an independent public company on April 1, 2019 after Ironwood Pharmaceuticals, Inc., or Ironwood, completed a tax-free spin-off of its sGC business, which we refer to herein as the "Separation".
Item 1. Business Overview Cyclerion Therapeutics, Inc. (“Cyclerion”, the “Company” or “we”) is a biopharmaceutical company on a mission to develop treatments for serious diseases. Cyclerion became an independent public company on April 1, 2019 after Ironwood Pharmaceuticals, Inc., or Ironwood, completed a tax-free spin-off of its sGC business, which we refer to herein as the “Separation”.
The nitric oxide ("NO") soluble guanylate cyclase ("sGC") cyclic guanosine monophosphate ("cGMP") signaling pathway is a fundamental mechanism that precisely controls key aspects of physiology throughout the body. The NO-sGC-cGMP pathway regulates diverse and critical biological functions including mitochondrial function, neuronal function, inflammation, and hemodynamics.
The nitric oxide (“NO”) sGC cyclic guanosine monophosphate (“cGMP”) signaling pathway is a fundamental mechanism that precisely controls key aspects of physiology throughout the body. The NO-sGC-cGMP pathway regulates diverse and critical biological functions in both the CNS and the periphery and has been successfully targeted with several drugs.
Our employees are further guided by our code of conduct and our cultural values of seeking to serve patients, acting with integrity, empowering people and innovating for solutions. We are committed to our employees’ health, safety and wellness. We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs.
Our employees will be further guided by our code of conduct and our cultural values of seeking to serve patients, acting with integrity, empowering people and innovating for solutions.
As a condition of approval, the FDA requires a sponsor to conduct confirmatory studies to verify the predicted effect on IMM or another clinical endpoint, and the product may be subject to expedited withdrawal procedures.
As a condition of approval, the FDA requires a sponsor to conduct confirmatory studies to verify the predicted effect on IMM or another clinical endpoint, and the product may be subject to expedited withdrawal procedures. 13 Once an NDA is submitted for a product intended to treat a serious condition, the FDA may assign a priority review designation if the FDA determines that the product, if approved, would provide a significant improvement in safety or effectiveness.
If one of our product candidates designated as an orphan drug receives marketing approval for an indication broader than that which is designated, it may not be entitled to orphan drug exclusivity. 13 Expedited Review and Approval The FDA has various programs that are intended to expedite development and approval of drugs intended for the treatment of serious or life-threatening diseases or conditions and that demonstrate the potential to address unmet medical needs.
Expedited Review and Approval Application Process The FDA has various programs that are intended to expedite development and approval of drugs intended for the treatment of serious or life-threatening diseases or conditions and that demonstrate the potential to address unmet medical needs.
Two pending U.S. patent applications, if issued, will expired in 2037 and provide additional coverage for polymorphs of olinciguat. Another pending U.S. patent application, if issued, will expire in 2031, and provides generic coverage for olinciguat.
Patent, US 11,357,777, is directed to the treatment of NASH with olinciguat and other compounds and will expire in 2039. One pending U.S. patent application, if issued, will expire in 2037 and provides additional coverage for polymorphs of olinciguat. Another pending U.S. patent application, if issued, will expire in 2031, and provides generic coverage for olinciguat.
We believe Biogen, Sage, Otsuka, Neumora, Tonix, Neurocrine, Pfizer, atai Life Sciences, Alto Neuroscience, Cerevel, Karuna, PTC Therapeutics, Khondrion B.V, Abliva AB, Reneo, Travere Therapeutics, Dimerix Limited, Vertex Pharmaceuticals, Chinook Therapeutics, Boehringer Ingelheim, Acelyrin, River 3 Renal Corp, Astellas, Pfizer, Eli Lilly, Novartis, AstraZeneca, Bayer and Merck are our most direct competitors with respect to zagociguat, CY3018, praliciguat, and olinciguat.
We believe PTC Therapeutics, Travere Therapeutics, Dimerix Limited, Vertex Pharmaceuticals, Chinook Therapeutics, Boehringer Ingelheim, River 3 Renal Corp, Astellas, Pfizer, Eli Lilly, Novartis, AstraZeneca, Bayer and Merck are our most direct competitors with respect to praliciguat, and olinciguat. Competition within the sGC mechanism . There is one major competitor that is actively developing sGC modulators.
CY3018 is a CNS-targeted sGC stimulator in preclinical development that preferentially localizes to the brain and has a pharmacology profile that suggests its potential for the treatment of neuropsychiatric diseases and disorders. Praliciguat is an orally administered, once-daily systemic sGC stimulator.
Sold to Tisento as part of the Asset Purchase Agreement. CY3018 (CNS-penetrant) Neuropsychiatric CY3018 is a CNS-penetrant sGC stimulator in preclinical development that has potential for the treatment of neuropsychiatric diseases and disorders.
We have several product opportunities including zagociguat for mitochondrial diseases, CY3018 for neuropsychiatric diseases, and olinciguat for cardiovascular/cardiopulmonary diseases. Our focus right now is to find the best combination of capital, capabilities, and transactions that will enable the advancement of these assets for patients in a way that maximizes shareholder value.
The Company’s goal is to find the best combination of capital, capabilities, and transactions that will enable the advancement of current and any future assets the Company may acquire for patients in a way that maximizes shareholder value.
Two U.S. issued patents, US 11,319,308 and 11,274,096, are directed to the syntheses of intermediates useful in the manufacture of olinciguat and will expire in 2037 and 2039, respectively. The ninth U.S. Patent, US 11,357,777, is directed to the treatment of NASH with olinciguat and other compounds and will expire in 2037.
Four more U.S. issued patents, US 11,319,308 (expiring in 2039), US 11,773,089 (expiring in 2037), US 11,274,096 (expiring in 2039), and US 11,834,444 (expiring in 2038 or potentially later) are directed to the chiral syntheses of olinciguat or the syntheses of intermediates useful in the manufacture of olinciguat. The last U.S.
Refer to Note 12, Workforce Reduction, to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for further details. Corporate Information We were incorporated in the Commonwealth of Massachusetts on September 6, 2018. Our principal executive offices are located at 245 First Street, Riverview II, 18 th Floor, Cambridge, MA 02142.
We may in the future seek to expand our employee base and also outsource certain functions to other firms. Corporate Information We were incorporated in the Commonwealth of Massachusetts on September 6, 2018. Our principal executive offices are located at 245 First Street, Riverview II, 18 th Floor, Cambridge, MA 02142. Our telephone number is (857) 327-8778.
The ninth and tenth U.S. Patents, US 11,319,308 and 11,274,096, are directed to the syntheses of intermediates useful in the manufacture of praliciguat. Two pending U.S. patent applications that, if issued, will expire in 2031 and 2034, respectively, provide generic coverage for praliciguat.
The tenth to thirteen, U.S. Patents, US 11,319,308 (expiring in 2039), US 11,773,089 (expiring in 2037), US 11,274,096 (expiring in 2039) and US 11,708,361 (expiring in 2039) are directed to the syntheses of praliciguat or of intermediates useful in the manufacture of praliciguat.
Once an NDA is submitted for a product intended to treat a serious condition, the FDA may assign a priority review designation if the FDA determines that the product, if approved, would provide a significant improvement in safety or effectiveness. Under priority review, the FDA must review an application in six months, compared to ten months for a standard review.
Under priority review, the FDA must review an application in six months, compared to ten months for a standard review. A product may be eligible for more than one expedited approval program.
As a small, innovative company, our success depends on attracting, retaining and motivating highly skilled and experienced scientific, medical and other personnel. Our ability to recruit and retain such employees depends on a number of factors, including our distinct corporate culture, and our collaborative work environment.
Human Capital Resources As a small, innovative company, if in the future we elect to start growing our internal operations, our success will depend on attracting, retaining and motivating highly skilled and experienced scientific, medical and other personnel.
We have twenty-six issued U.S. patents, twenty-eight pending U.S. patents applications (of which six are in the provisional stage), four pending Patent Cooperation Treaty, or PCT, application, and numerous foreign patents 7 and pending patent applications.
We have nineteen issued U.S. patents, nine pending U.S. patents applications and numerous foreign patents and pending patent applications.
Competitors, however, may receive approval of different active moieties for the same indication or obtain approval for the same active moiety for a different indication.
Competitors, however, may receive approval of different active component parts for the same indication or obtain approval for the same active component parts for a different indication. If one of our product candidates designated as an orphan drug receives marketing approval for an indication broader than that which is designated, it may not be entitled to orphan drug exclusivity.
Removed
Item 1. Business Overview Cyclerion Therapeutics, Inc. (“Cyclerion”, the “Company” or “we”) is a biopharmaceutical company on a mission to develop treatments for serious diseases. Cyclerion's portfolio includes novel soluble guanylate cyclase ("sGC") stimulators that modulate a key node in a fundamental signaling network in both the central nervous system ("CNS") and the periphery.
Added
Cyclerion Securities Corporation, a wholly owned subsidiary, was incorporated in Massachusetts on November 15, 2019 and was granted securities corporation status in Massachusetts for the 2019 tax year. At inception, Cyclerion was a biopharmaceutical company focused on the treatment of serious diseases with novel soluble guanylate cyclase ("sGC") stimulators in both the central nervous system (“CNS”) and the periphery.
Removed
Although this pathway has been successfully targeted with several drugs in the periphery, this mechanism has yet to be fully leveraged therapeutically, particularly in the CNS, where impaired NO-sGC-cGMP signaling is believed to play an important role in the pathogenesis of many neurodegenerative and neuropsychiatric diseases.
Added
On July 28, 2023, the Company sold two of its CNS-penetrant sGC stimulator assets, - zagociguat and CY3018 – (the “Transferred Assets”) to Tisento in exchange for $8.0 million in cash consideration, $2.4 million as reimbursement for certain operating expenses related to the Transferred Assets for the period between signing and closing of the transaction, and 10% of all of Tisento’s parent’s outstanding equity securities at the time of the closing.
Removed
Zagociguat (previously CY6463) is a clinical-stage CNS-penetrant sGC stimulator that has shown rapid improvement in cerebral blood flow, functional brain connectivity, brain response to visual stimulus, cognitive performance, and biomarkers associated mitochondrial function and inflammation in clinical studies.
Added
See “Tisento Asset Purchase Agreement” below. Prior to the sale of the Transferred Assets, Cyclerion’s portfolio included novel sGC stimulators that modulate signaling networks in both the CNS and the periphery.
Removed
CY 3018 is a CNS-targeted sGC stimulator that preferentially localizes to the brain and has a pharmacology profile that suggests its potential for the treatment of neuropsychiatric diseases and disorders. Praliciguat is a systemic sGC stimulator that is licensed to Akebia Therapeutics, Inc. ("Akebia") and being advanced in rare kidney disease.
Added
The following table is a high-level summary of Cyclerion’s portfolio assets prior to the sale: Program Indication(s) Description Status Zagociguat (CNS-penetrant) MELAS syndrome (mitochondrial encephalopathy, lactic acidosis, and stroke-like episodes syndrome), cognitive impairment associated with schizophrenia, and Alzheimer's Disease with Vascular Pathology (ADV) Zagociguat is a CNS-penetrant sGC stimulator that has shown rapid improvements across a range of endpoints reflecting multiple domains of disease activity, including mitochondrial disease-associated biomarkers.
Removed
Olinciguat is a clinical-stage vascular sGC stimulator that the Company intends to out-license for cardiovascular diseases. Cyclerion is actively evaluating the best combination of capital, capabilities, and transactions available to it to advance the development of zagociguat and its other clinical development candidates and to maximize shareholder value.
Added
Sold to Tisento as part of the Asset Purchase Agreement Olinciguat (peripheral) Cardiovascular Olinciguat is a vascular sGC stimulator that the Company Management plans to seek to out-license olinciguat 5 intends to out-license for cardiovascular diseases. Praliciguat (peripheral) Focal Segmental Glomerulosclerosis (FSGS) Praliciguat is a systemic sGC stimulator that is licensed to Akebia for the treatment of rare kidney disease.
Removed
We are 5 led by an accomplished team, with a track record of discovering, developing, and commercializing meaningful therapies for patients while creating value for stockholders and with expertise and deep experience in the NO-sGC-cGMP pathway. Drug development involves a high degree of risk and investment, and the status, timing and scope of our development programs are subject to change.
Added
Out-licensed to Akebia Although all assets that were within Cyclerion’s portfolio were sGC stimulators, the Transferred Assets sold to Tisento are uniquely different from the assets retained by Cyclerion (olinciguat and praliciguat). The Transferred Assets have high exposure to the CNS (i.e., CNS-penetrant sGC stimulators) and the Cyclerion retained assets are peripheral sGC stimulators.
Removed
Important factors that could adversely affect our drug development efforts are discussed in the “Risk Factors” section of this Annual Report on Form 10-K. Research and Development programs Zagociguat is an orally administered CNS-penetrant sGC stimulator. NO-sGC-cGMP is a fundamental signaling network, including in the brain where it is critical to basic CNS functions.
Added
The retained assets are therefore not interchangeable with the Transferred Assets and do not provide the same benefit in CNS and correspondingly the Transferred Assets do not provide the same potential benefit for systemic/vascular diseases. Cyclerion assets which have been retained are either currently out-licensed (praliciguat) or management is seeking to out-license (olinciguat).
Removed
Deficient NO-sGC-cGMP signaling is believed to play an important role in the pathogenesis of many peripheral and CNS disorders. As an sGC stimulator, zagociguat amplifies endogenous NO signaling by acting as a positive allosteric modulator to sensitize the sGC enzyme to NO and increase the production of cGMP.
Added
The Company’s prior strategy to conduct research and development on sGC stimulators for CNS has been discontinued subsequent to the sale of the Transferred Assets. Cyclerion does not intend to internally pursue research and development or commercialization with any type of sGC assets.
Removed
By compensating for deficient NO-sGC-cGMP signaling, zagociguat may have broad therapeutic potential as a treatment for people with serious diseases. On January 13, 2020, we announced positive results from our Phase 1 first-in-human study that provided the first clinical data supporting the development of zagociguat. The results from this study indicate that zagociguat was well tolerated.
Added
Cyclerion intends to utilize royalties and milestones from olinciguat and praliciguat out-licensing to build a new portfolio and advance the development of those new assets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

142 edited+85 added−23 removed209 unchanged
Biggest changeIf these third parties do not execute successfully, our business could be substantially harmed. • We share confidential information with third-party vendors, including trade secrets and know-how, which increases the possibility that our confidential information will be misappropriated or disclosed. • We may be unable to adequately protect our proprietary technologies or obtain and maintain issued patents that are sufficient to protect our product candidates. • We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts. • We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property. • We may not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection. • We may not be able to obtain additional protection under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, and similar foreign legislation by extending the patent terms and obtaining data exclusivity for our product candidates. • We may be subject to damages resulting from claims that we or our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers. • If the market opportunities for our product candidates are smaller than we estimate, our revenue and ability to achieve profitability may be harmed. • We may fail to comply with healthcare and other regulations and could face substantial penalties. 19 • Our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours. • The impact of healthcare reform and other governmental and private payor initiatives may harm our business. • Our prospects for success depend on our ability to retain our management team and to attract, retain and motivate qualified personnel. • We may need to expand our organization and we may experience difficulties in managing growth of our employee base. • We face potential product liability exposure, and, if claims are brought against us, we may incur substantial liability. • We could fail to maintain proper and effective internal controls and our ability to produce accurate and timely financial statements could be impaired. • Our internal computer systems, or those of our third-party CROs, CMOs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product candidates' development programs. • If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur. • We could be adversely affected by violations of the U.S.
Biggest changeIf these third parties do not execute successfully, our business could be substantially harmed. • We share confidential information with third-party vendors, including trade secrets and know-how, which increases the possibility that our confidential information will be misappropriated or disclosed. • We may be unable to adequately protect our proprietary technologies or obtain and maintain issued patents that are sufficient to protect our product candidates. • We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts. • We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property. • We may not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection. • We may not be able to obtain additional protection under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, and similar foreign legislation by extending the patent terms and obtaining data exclusivity for our product candidates. • We may be subject to damages resulting from claims that we or our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers. • If the market opportunities for our product candidates are smaller than we estimate, our revenue and ability to achieve profitability may be harmed. • We may fail to comply with healthcare and other regulations and could face substantial penalties. • Our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours. • The impact of healthcare reform and other governmental and private payor initiatives may harm our business. • Our prospects for success depend on our ability to attract, retain and motivate qualified personnel. • We may need to expand our organization and we may experience difficulties in managing growth of our employee base. • We face potential product liability exposure, and, if claims are brought against us, we may incur substantial liability. • We could fail to maintain proper and effective internal controls and our ability to produce accurate and timely financial statements could be impaired. • If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions; litigation; fines and penalties; interruptions to our commercial operations, clinical trials or other operations; harm to our reputation; loss of revenue or profits; loss of sales and other adverse consequences. • If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur. • We could be adversely affected by violations of the U.S.
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that there will be success in obtaining regulatory approval of our product candidates in other jurisdictions. In order to market any product outside of the United States, compliance with the numerous and varying safety, efficacy and other regulatory requirements of other countries is required.
Obtaining and maintaining regulatory approval of product candidates in one jurisdiction does not mean that there will be success in obtaining regulatory approval of our product candidates in other jurisdictions. In order to market any product outside of the United States, compliance with the numerous and varying safety, efficacy and other regulatory requirements of other countries is required.
Collaboration and license arrangements are subject to numerous risks, including that: • partners have significant discretion in determining the efforts and resources that they will apply to collaborations; • a partner with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • partners may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • collaboration and license arrangements may be terminated, and, if terminated, this may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates; • partners may own or co-own intellectual property covering products that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; • disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaboration or license arrangements; and 26 • a partner’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Collaboration and license arrangements are subject to numerous risks, including that: • partners have significant discretion in determining the efforts and resources that they will apply to collaborations; • a partner with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • partners may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; 26 • collaboration and license arrangements may be terminated, and, if terminated, this may result in a need for additional capital to pursue further development or commercialization of the applicable current or any potential future product candidates; • partners may own or co-own intellectual property covering products that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; • disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaboration or license arrangements; and • a partner’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
These estimates have been derived from a variety of sources, including the scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect. Further, new trials may change the estimated incidence or prevalence of these diseases.
These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect. Further, new trials may change the estimated incidence or prevalence of these diseases.
Market acceptance of our product candidates, if approved, will depend on a number of factors, including, among others: • the efficacy and safety of our approved product candidates as demonstrated in clinical trials; • the clinical indications and labeling claims for our product candidates that are approved; • limitations or warnings contained in the labeling approved for our product candidates by the FDA or other applicable regulatory authorities; • any restrictions on the use of our product candidates together with other medications or restrictions on the use of our products in certain types of patients; • the prevalence and severity of any adverse effects associated with our product candidates; • the size of the target patient population, and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the safety, efficacy, cost and other potential advantages of our approved product candidates compared to other available therapies; • our ability to generate cost effectiveness data that supports a profitable price; • our ability to obtain sufficient reimbursement and pricing by third-party payors and government authorities; • the willingness of patients to pay out-of-pocket in the absence of sufficient payor coverage; 34 • the effectiveness of our sales and marketing strategies; or • publicity concerning our product candidates or competing products and treatments.
Market acceptance of our product candidates, if approved, will depend on a number of factors, including, among others: • the efficacy and safety of our approved product candidates as demonstrated in clinical trials; • the clinical indications and labeling claims for our product candidates that are approved; • limitations or warnings contained in the labeling approved for our product candidates by the FDA or other applicable regulatory authorities; • any restrictions on the use of our product candidates together with other medications or restrictions on the use of our products in certain types of patients; 34 • the prevalence and severity of any adverse effects associated with our product candidates; • the size of the target patient population, and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the safety, efficacy, cost and other potential advantages of our approved product candidates compared to other available therapies; • our ability to generate cost effectiveness data that supports a profitable price; • our ability to obtain sufficient reimbursement and pricing by third-party payors and government authorities; • the willingness of patients to pay out-of-pocket in the absence of sufficient payor coverage; • the effectiveness of our sales and marketing strategies; or • publicity concerning our product candidates or competing products and treatments.
In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things: withdrawal of subjects from our clinical studies; substantial monetary awards to patients or other claimants; decreased demand for our product candidates or any future product candidates following marketing approval, if obtained; damage to our reputation and exposure to adverse publicity; increased FDA warnings on product labels; litigation costs; distraction of management's attention from our primary business; loss of potential revenue; and the inability to successfully commercialize our product candidates or any future product candidates, if approved.
In addition, regardless of merit or eventual outcome, product liability claims may result in, among other things: withdrawal of subjects from our clinical studies; substantial monetary awards to patients or other claimants; decreased demand for our product candidates or any future product candidates following marketing approval, if obtained; damage to our reputation and exposure to adverse publicity; increased FDA warnings on product labels; litigation costs; distraction of management's attention from our primary business; loss of potential revenue; and the inability to successfully commercialize our product candidates or any potential future product candidates, if approved.
The completion or commencement of clinical studies can be delayed or prevented for a number of reasons, including, among others: • the FDA or other regulatory bodies may not authorize us or our investigators to commence planned clinical studies, or require that ongoing clinical studies be suspended through imposition of clinical holds; • negative results from ongoing studies or other industry studies involving product candidates modulating the same or similar mechanism of action; • delays in reaching or failing to reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical study sites, the terms of which can be subject to considerable negotiation and may vary significantly among different CROs and study sites; • inadequate quantity or quality of a product candidate or other materials necessary to conduct clinical studies, for example delays in the manufacturing of sufficient supply of finished drug product; • difficulties obtaining EC or IRB approval(s) to conduct a clinical study at a prospective site or sites; • challenges in recruiting and enrolling participants in clinical studies, the proximity of participants to study sites, eligibility criteria for the clinical study, the nature of the clinical study protocol, the 23 availability of approved effective treatments for the relevant disease and competition from other clinical study programs for similar indications; • severe or unexpected drug-related side effects experienced by participants in a clinical study; • the presence of unanticipated metabolites in participants in a clinical study may require considerable nonclinical and clinical assessment; • we or our licensees may decide, or regulatory authorities may require the conduct of additional clinical studies or abandonment of product development programs; • delays in validating, or inability to validate, any endpoints utilized in a clinical study; • the FDA or other regulatory bodies may disagree with a clinical study's design and the interpretation of data from clinical studies, or may change the requirements for approval even after it has reviewed and commented on the design for clinical studies; • reports from nonclinical or clinical testing of other competing candidates that raise safety or efficacy concerns; and • difficulties retaining participants who have enrolled in a clinical study but may be prone to withdraw due to rigors of the clinical studies, lack of efficacy, side effects, personal issues, or loss of interest.
The completion or commencement of clinical studies can be delayed or prevented for a number of reasons, including, among others: • the FDA or other regulatory bodies may not authorize us or our investigators to commence planned clinical studies, or require that ongoing clinical studies be suspended through imposition of clinical holds; • negative results from ongoing studies or other industry studies involving product candidates modulating the same or similar mechanism of action; • delays in reaching or failing to reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical study sites, the terms of which can be subject to considerable negotiation and may vary significantly among different CROs and study sites; • inadequate quantity or quality of a product candidate or other materials necessary to conduct clinical studies, for example delays in the manufacturing of sufficient supply of finished drug product; • difficulties obtaining EC or IRB approval(s) to conduct a clinical study at a prospective site or sites; • challenges in recruiting and enrolling participants in clinical studies, the proximity of participants to study sites, eligibility criteria for the clinical study, the nature of the clinical study protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical study programs for similar indications; • severe or unexpected drug-related side effects experienced by participants in a clinical study; • the presence of unanticipated metabolites in participants in a clinical study may require considerable nonclinical and clinical assessment; • we, our licensees or Tisento may decide, or regulatory authorities may require the conduct of additional clinical studies or abandonment of product development programs; • delays in validating, or inability to validate, any endpoints utilized in a clinical study; • the FDA or other regulatory bodies may disagree with a clinical study’s design and the interpretation of data from clinical studies, or may change the requirements for approval even after it has reviewed and commented on the design for clinical studies; • reports from nonclinical or clinical testing of other competing candidates that raise safety or efficacy concerns; and • difficulties retaining participants who have enrolled in a clinical study but may be prone to withdraw due to rigors of the clinical studies, lack of efficacy, side effects, personal issues, or loss of interest.
We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total gross annual revenues of $1.07 billion or more; (ii) December 31, 2024, the last day of our fiscal year following the fifth anniversary of the date of the Separation; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total gross annual revenues of $1.07 billion or more; (ii) December 31, 2024, the last day of our fiscal year following the fifth anniversary of the date of the Separation; (iii) the date on which we have 40 issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
If unable to obtain a patent term extension or the term of any such extension is less than we request, the duration of patent protection obtained for our product candidates may not provide any meaningful commercial or competitive advantage, competitors may obtain approval of competing products earlier than they would otherwise be able to do so, and our ability to generate revenues could be harmed.
If unable to obtain a patent term extension or the term of any such extension is less 32 than we request, the duration of patent protection obtained for our product candidates may not provide any meaningful commercial or competitive advantage, competitors may obtain approval of competing products earlier than they would otherwise be able to do so, and our ability to generate revenues could be harmed.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions, possible exclusions from participation in Medicare, Medicaid and other U.S. federal healthcare programs, contractual damages and reputational harm.
If any such actions are 43 instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions, possible exclusions from participation in Medicare, Medicaid and other U.S. federal healthcare programs, contractual damages and reputational harm.
Risks Related to Our Intellectual Property Rights If we or our licensees are unable to adequately protect proprietary technologies, or obtain and maintain issued patents that are sufficient to protect our product candidates, others could compete against us more directly, which would have a material adverse impact on our business, prospects, financial condition and results of operations.
Risks Related to Our Intellectual Property Rights If we or our licensees or Tisento are unable to adequately protect proprietary technologies, or obtain and maintain issued patents that are sufficient to protect our product candidates, others could compete against us, our licensees and Tisento more directly, which would have a material adverse impact on our business, prospects, financial condition and results of operations.
We face significant competition in an environment of rapid technological and scientific change, and our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may harm our ability, or a licensee's ability, to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.
We face significant competition in an environment of rapid technological and scientific change, and our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or 36 more effective than ours, which may harm our ability, or a licensee's ability, to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.
Because patent applications can take many years to issue, third parties may have currently pending patent applications which may later result in issued patents that our product candidates may infringe, or which such third parties claim are infringed by our technologies. The pharmaceutical industry is characterized by extensive litigation regarding patents and other intellectual property rights.
Because patent applications can take many years to issue, third parties may have currently pending patent applications which may later result in issued patents that our product candidates may infringe, or which such third parties claim are infringed by our technologies. 30 The pharmaceutical industry is characterized by extensive litigation regarding patents and other intellectual property rights.
If these developments were to occur, they could have a material adverse effect on our business, prospects, financial condition and results of operations. 29 Any litigation to enforce or defend patent rights, even if successful, would be costly and time-consuming and would divert the attention of management and key personnel from business operations.
If these developments were to occur, they could have a material adverse effect on our business, prospects, financial condition and results of operations. Any litigation to enforce or defend patent rights, even if successful, would be costly and time-consuming and would divert the attention of management and key personnel from business operations.
A severe or prolonged economic downturn could result in a variety of risks to our business, 41 including, weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption.
A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption.
The timing of any clinical studies will depend in part on the speed at which participants can be recruited to participate in testing our product candidates. Estimates of the prevalence of target indications may vary considerably. Determining the incidence of these conditions, including in specific geographies or demographic groups, would be challenging.
The timing of any clinical studies will depend in part on the speed at which participants can be recruited to participate in testing these product candidates. Estimates of the prevalence of target indications may vary considerably. Determining the incidence of these conditions, including in specific geographies or demographic groups, would be challenging.
Despite these contractual provisions, the need to share our confidential information with third parties increases the risk that confidential information such as trade secrets and know-how becomes known by our competitors, is inadvertently incorporated into the technology of others, or is disclosed or used in violation of these agreements.
Despite these contractual provisions, the need to share our confidential information with third parties increases the risk that confidential information such as trade secrets and know-how becomes known by our competitors, is inadvertently incorporated into the technology of others, or is 28 disclosed or used in violation of these agreements.
The America Invents Act includes a number of significant changes to U.S. patent law. These provisions affect the way patent applications will be prosecuted and 32 may also affect patent litigation. It is not yet clear what, if any, impact the America Invents Act will have on the operation of our business.
The America Invents Act includes a number of significant changes to U.S. patent law. These provisions affect the way patent applications will be prosecuted and may also affect patent litigation. It is not yet clear what, if any, impact the America Invents Act will have on the operation of our business.
Our future success depends on our ability, or a licensee's ability, to demonstrate and maintain a competitive advantage with respect to the design, development and commercialization of our product candidates. In many cases, our product candidates that may be commercialized will compete with existing, market-leading products. The 36 development and commercialization of new drug products is highly competitive.
Our future success depends on our ability, or a licensee's ability, to demonstrate and maintain a competitive advantage with respect to the design, development and commercialization of our product candidates. In many cases, our product candidates that may be commercialized will compete with existing, market-leading products. The development and commercialization of new drug products is highly competitive.
Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities. We also could incur significant costs associated with civil or criminal fines and penalties. 42 We could be adversely affected by violations of the U.S.
Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities. We also could incur significant costs associated with civil or criminal fines and penalties. We could be adversely affected by violations of the U.S.
Even if one or more of the product candidates that we develop is approved for commercial sale, we may never generate revenue in amounts sufficient to achieve and maintain profitability. There is substantial doubt about our ability to continue as a going concern.
Even if one or more of the product candidates that we develop is approved for commercial sale, we may never generate revenue in amounts sufficient to achieve and maintain profitability. 20 There is substantial doubt about our ability to continue as a going concern.
Nevertheless, we may be responsible for ensuring that each of our nonclinical and clinical studies is conducted in accordance with any applicable protocol, legal, regulatory and scientific requirements and standards, and our reliance on CROs and other third parties does not necessarily relieve us of our regulatory responsibilities.
Nevertheless, we may be responsible for ensuring that each of any future nonclinical and clinical studies is conducted in accordance with any applicable protocol, legal, regulatory and scientific requirements and standards, and our reliance on CROs and other third parties does not necessarily relieve us of our regulatory responsibilities.
In some instances, significant variability in safety or efficacy appear in different clinical studies of the same product candidate due to numerous factors, including changes in study protocols, differences in the number and characteristics of the enrolled study participants, variations in the dosing regimen and other clinical study parameters or the dropout rate among study participants.
In some instances, significant variability in safety or efficacy appear in different clinical studies of the same product candidate due to numerous factors, 21 including changes in study protocols, differences in the number and characteristics of the enrolled study participants, variations in the dosing regimen and other clinical study parameters or the dropout rate among study participants.
In some cases, the price intended to be charged for a product candidate is also subject to approval. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs and could delay or prevent the introduction of our product candidates in certain countries.
In some cases, the price intended to be charged for a product candidate is also subject to approval. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs and could delay or prevent the introduction of product candidates in certain countries.
We expect to continue to rely on CMOs for the supply of later-stage development and commercialization, as well as for the supply of any other discovery compounds or product candidates that we may identify, and we may not be able to enter into long-term supply agreements with such CMOs on favorable terms.
We expect to rely on CMOs for the supply of later-stage development and commercialization, as well as for the supply of any other discovery compounds or product candidates that we may identify, and we may not be able to enter into long-term supply agreements with such CMOs on favorable terms.
It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing health care legislation. We cannot predict the reform initiatives that may be adopted in the future 37 or whether initiatives that have been adopted will be repealed or modified.
It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing health care legislation. We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified.
If the CROs, or our licensees, do not perform clinical studies in a satisfactory manner, breach their obligations to us or fail to comply with regulatory requirements, the development and commercialization of our product candidates may be delayed or our development program materially and irreversibly harmed.
If the CROs, or our licensees, do not perform clinical studies in a satisfactory manner, breach their obligations to us or fail to comply with regulatory 27 requirements, the development and commercialization of our product candidates may be delayed, or our development program materially and irreversibly harmed.
We operate in a highly regulated industry and new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health care availability, the method of delivery or payment for health care products and services could harm our business, operations and financial condition.
We operate in a highly regulated industry and new laws, regulations or judicial decisions, or new interpretations of existing laws, regulations or decisions, related to health care availability, the method of delivery or 37 payment for health care products and services could harm our business, operations and financial condition.
If any of the foregoing 44 occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. The market price for our common stock is particularly volatile.
If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. The market price for our common stock is particularly volatile.
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that obtaining or maintaining regulatory approval in any other jurisdiction will be possible, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.
Obtaining and maintaining regulatory approval of product candidates in one jurisdiction does not guarantee that obtaining or maintaining regulatory approval in any other jurisdiction will be possible, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.
In some countries, we or our partners may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.
In some countries, we or our partners may be required to conduct a clinical trial or other 35 studies that compare the cost-effectiveness of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.
As a result, we believe that our 27 financial results and the commercial prospects for our product candidates in the approved indication would be harmed, our costs could increase and our ability to generate revenue could be delayed, or lost.
As a result, we believe that our financial results and the commercial prospects for our product candidates in the approved indication would be harmed, our costs could increase and our ability to generate revenue could be delayed or lost.
Amendments or changes to clinical study protocols 24 would require resubmission to the FDA and IRBs for review and approval, which may increase the cost or delay the timing or successful completion of clinical studies. Similarly, amendments to nonclinical studies may increase the cost or delay the timing or successful completion of those nonclinical studies.
Amendments or changes to clinical study protocols would require resubmission to the FDA and IRBs for review and approval, which may increase the cost or delay the timing or successful completion of clinical studies. Similarly, amendments to nonclinical studies may increase the cost or delay the timing or successful completion of those nonclinical studies.
Projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on beliefs and estimates.
Projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, 33 are based on beliefs and estimates.
Our reliance on third parties requires us to share our confidential information, including trade secrets and know-how, which increases the possibility that our confidential information will be misappropriated or disclosed.
Our anticipated reliance on third parties requires us to share our confidential information, including trade secrets and know-how, which increases the possibility that our confidential information will be misappropriated or disclosed.
As a result 40 of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, prospects, financial condition and results of operations.
As a result of these factors, a product liability claim, even if successfully defended, could have a material adverse effect on our business, prospects, financial condition and results of operations.
Any claim relating to intellectual property infringement that is successfully asserted against us may require us to pay substantial damages, including treble damages and attorney's fees if we are found to be willfully infringing another party's patents, for past use of the asserted intellectual property and royalties and other consideration going forward if we are forced to take a license.
Any claim relating to intellectual property infringement that is successfully asserted against us may require us to pay substantial damages, including treble damages and attorneys’ fees if we are found to be willfully infringing another party’s patents, for past use of the asserted intellectual property and royalties and other consideration going forward if we are forced to take a license.
As a result, we have limited direct control over the conduct, timing and completion of our nonclinical and clinical studies and the management of data developed through these studies. Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.
As a result, we expect we will have limited direct control over the conduct, timing and completion of our nonclinical and clinical studies and the management of data developed through these studies. Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.
Our management believes that such cash and cash equivalents will not be sufficient to fund our operating expenses and capital requirements for one year after the date the financial statements are issued, whether or not we curtail efforts with respect to certain of our product candidates.
Our management believes that such cash and cash equivalents will not be sufficient to fund our operating expenses and capital requirements for one year after the date the financial statements are issued, whether or not we curtail efforts with respect to certain of our current and future product candidates.
Our common stock has a limited trading history and the market price has fluctuated widely, and may in the future fluctuate widely, depending upon many factors, some of which are beyond our control, including the following: • a relatively low-volume trading market for our shares of common stock may result, which could cause trades of small blocks of shares to have a significant impact on the price of our shares of common stock; • results and timing of nonclinical studies and clinical studies of our product candidates; • the commercial performance of our product candidates, if approved, as well as the costs associated with such activities; • results of clinical studies of our competitors' products; • failure to adequately protect our trade secrets; • our inability to raise additional capital and the terms on which we raise it; • commencement or termination of any strategic partnership or licensing arrangement; • regulatory developments with respect to our product candidates or our competitors' products, including any developments, litigation or public concern about the safety of such products; • announcements concerning product development results, including clinical trial results, the introduction of new products or intellectual property rights of us or others; • actual or anticipated fluctuations in our financial condition and our quarterly and annual operating results; • deviations in our operating results from any guidance we may provide or the estimates of securities analysts; • sufficiency, additions and departures of key personnel; • the passage of legislation or other regulatory developments affecting us or our industry; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • sales of our common stock by us, our insiders or our other shareholders; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • announcement or expectation of additional financing efforts; • publication of research reports by securities analysts about us or our competitors or our industry and speculation regarding our company or our stock price in the financial or scientific press or in online investor communities; • changes in market conditions in the pharmaceutical and biotechnology sector; • Nasdaq's rules, which impose certain continued listing requirements, including a minimum $1 bid price, such that a failure to meet these requirements would lead Nasdaq to take further steps to delist our common stock; and • changes in general market and economic conditions.
Our common stock has a limited trading history and the market price has fluctuated widely, and may in the future fluctuate widely, depending upon many factors, some of which are beyond our control, including the following: • a relatively low-volume trading market for our shares of common stock may result, which could cause trades of small blocks of shares to have a significant impact on the price of our shares of common stock; • results and timing of nonclinical studies and clinical studies of our product candidates; • the commercial performance of our product candidates, those out-licensed to third parties and the Transferred Assets sold to Tisento, if approved, as well as the costs associated with such activities; • results of clinical studies of our competitors' products; • failure to adequately protect our trade secrets; • our inability to raise additional capital and the terms on which we raise it; • commencement or termination of any strategic partnership or licensing arrangement; • regulatory developments with respect to our product candidates or our competitors' products, including any developments, litigation or public concern about the safety of such products; • announcements concerning product development results, including clinical trial results, the introduction of new products or intellectual property rights of us or others; • actual or anticipated fluctuations in our financial condition and our quarterly and annual operating results; • deviations in our operating results from any guidance we may provide or the estimates of securities analysts; • sufficiency, additions and departures of key personnel; • the passage of legislation or other regulatory developments affecting us or our industry; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • sales of our common stock by us, our insiders or our other shareholders; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • announcement or expectation of additional financing efforts; • publication of research reports by securities analysts about us or our competitors or our industry and speculation regarding our company or our stock price in the financial or scientific press or in online investor communities; • changes in market conditions in the pharmaceutical and biotechnology sector; 45 • Nasdaq's rules, which impose certain continued listing requirements, including a minimum $1 bid price, such that a failure to meet these requirements would lead Nasdaq to take further steps to delist our common stock; and • changes in general market and economic conditions.
Obtaining and enforcing patents in the biotechnology industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation: the Leahy-Smith America Invents Act, or the America Invents Act.
Obtaining and enforcing patents in the biotechnology industry involves both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation: the Leahy-Smith America Invents Act, or the America Invents Act.
We, our CROs and other third parties are required to comply with regulations and guidelines, such as good laboratory practices (GLPs), good clinical practices (GCPs), and current Good Manufacturing Practices. These regulations are enforced by the FDA and comparable foreign regulatory authorities for any products in clinical development.
We, and any future CROs and other third parties are required to comply with regulations and guidelines, such as good laboratory practices (GLPs), good clinical practices (GCPs), and current Good Manufacturing Practices. These regulations are enforced by the FDA and comparable foreign regulatory authorities for any products in clinical development.
Massachusetts state law also prohibits us from engaging in specified business combinations unless the combination is approved or consummated in a prescribed manner. These 45 provisions, alone or together, could delay hostile takeovers and changes in control of our company or changes in our management.
Massachusetts state law also prohibits us from engaging in specified business combinations unless the combination is approved or consummated in a prescribed manner. These 48 provisions, alone or together, could delay hostile takeovers and changes in control of our company or changes in our management.
We do not currently have, nor do we plan to acquire, the infrastructure or capability to internally manufacture the drug supply of our product candidates, or any future product candidates, for use in the conduct of our nonclinical and clinical studies. We lack the internal resources and the capability to manufacture any product candidates on any scale.
We do not currently have, nor do we plan to acquire, the infrastructure or capability to internally manufacture the drug supply of our current or any potential future product candidates, for use in the conduct of our nonclinical and clinical studies. We lack the internal resources and the capability to manufacture any product candidates on any scale.
If our product candidates were to fail to obtain orphan drug status, or lose such status after it is obtained, or the marketing exclusivity that such status provides, our business, prospects, financial condition and results of operations could be materially harmed.
If these product 24 candidates were to fail to obtain orphan drug status, or lose such status after it is obtained, or the marketing exclusivity that such status provides, our business, prospects, financial condition and results of operations could be materially harmed.
Our employees, consultants, non-academic outside scientific collaborators and other advisors enter into confidentiality and intellectual property assignment agreements with us or have entered into confidentiality and intellectual property assignment agreements with Ironwood. We seek to have inventions assigned to us by the parties rendering services whenever possible.
Our employee, consultants, non-academic outside scientific collaborators and other advisors enter into confidentiality and intellectual property assignment agreements with us or have entered into confidentiality and intellectual property assignment agreements with Ironwood. We seek to have inventions assigned to us by the parties rendering services whenever possible.
Furthermore, the extent to which the pandemic, or future outbreaks of infectious disease, hinders access to facilities, procurement of resources, raw materials or components necessary for research studies or preclinical or clinical development is not fully predictable.
Furthermore, the extent to which the COVID-19 pandemic, or future outbreaks of infectious disease, hinders access to facilities, procurement of resources, raw materials or components necessary for research studies or preclinical or clinical development is not fully predictable.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, necessary regulatory approvals for or commercialization of our product candidates may not be obtainable and our business could be substantially harmed. We do not have the infrastructure or internal resources and capabilities to independently conduct nonclinical or clinical studies.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, necessary regulatory approvals for or commercialization of any potential future product candidates may not be obtainable and our business could be substantially harmed. We do not have the infrastructure or internal resources and capabilities to independently conduct nonclinical or clinical studies.
Beginning with our annual report on Form 10-K for the fiscal year ended December 31, 2022, we must include a management assessment of the effectiveness of our internal control over financial reporting.
Beginning with our annual report on Form 10-K for the fiscal year ended December 31, 2023, we must include a management assessment of the effectiveness of our internal control over financial reporting.
In addition, the facilities used by our contract manufacturers to manufacture the active pharmaceutical ingredient and final drug product must complete a pre-approval inspection by the FDA and other comparable foreign regulatory agencies to assess compliance with applicable requirements, including current GMP, after we submit our new drug application, or NDA, or relevant foreign regulatory submission to the applicable regulatory agency.
In addition, any facilities which may be used by contract manufacturers to manufacture the active pharmaceutical ingredient and final drug product must complete a pre-approval inspection by the FDA and other comparable foreign regulatory agencies to assess compliance with applicable requirements, including current GMP, after we submit our new drug application, or NDA, or relevant foreign regulatory submission to the applicable regulatory agency.
Our success will depend significantly on our and our licensees ability to obtain and maintain patent and other proprietary protection in the United States and other countries for commercially important technology, 28 inventions and know-how related to our business, defend and enforce patents, should they issue, preserve the confidentiality of trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties.
Our success will depend in part on our and our licensees and Tisento’s ability to obtain and maintain patent and other proprietary protection in the United States and other countries for commercially important technology, inventions and know-how related to our business, defend and enforce patents, should they issue, preserve the confidentiality of trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties.
We expect to incur significant losses for several years, as we continue our research activities and conduct development of, and seek regulatory approvals for, our product candidates.
We expect to incur significant losses for at least several years, as we continue our research activities and conduct development of, and seek regulatory approvals for, our product candidates.
Delays and disruptions from the pandemic, or future outbreaks of infectious disease, may increase our capital needs while potentially interfering with our access to capital.
Delays and disruptions from the COVID-19 pandemic, or future outbreaks of infectious disease, may increase our capital needs while potentially interfering with our access to capital.
Our future growth may depend, in part, on our, or a licensee's, ability to commercialize our product candidates outside the United States, where we would be subject to additional regulatory burdens and other risks and uncertainties.
Our future growth may depend, in part, on our, or a licensee's, ability to commercialize any current and potential future product candidates outside the United States, where we would be subject to additional regulatory burdens and other risks and uncertainties.
Our business was conducted within Ironwood prior to that time, and we had no history as an independent company prior to the completion of the Separation. We are developing a pipeline of sGC stimulators, but we have no products approved for commercial sale, and we have never generated revenue from product sales.
Our business was conducted within Ironwood prior to that time, and we had no history as an independent company prior to the completion of the separation which occurred in 2019. We are developing a pipeline of sGC stimulators, but we have no products approved for commercial sale, and we have never generated revenue from product sales.
We do not expect to pay any cash dividends for the foreseeable future. We do not anticipate that we will pay any cash dividends to holders of our common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand our operations.
We do not expect to pay any cash dividends for the foreseeable future. We have never paid cash dividends and we do not anticipate that we will pay any cash dividends to holders of our common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand our operations.
Although we or our licensees may design or approve the designs of our product candidate clinical studies, CROs and other third parties conduct those clinical studies. As a result, many important aspects of the execution of the development programs for our product candidates may be outside of our direct control.
Although we or our current licensee or any future licensees may design or approve the designs of our product candidate clinical studies, CROs and other third parties conduct those clinical studies. As a result, many important aspects of the execution of the development programs for our product candidates may be outside of our direct control.
We will need to raise additional funding, which may not be available on acceptable terms, if at all to continue as a going 18 concern and advance our product candidates. Failure to obtain capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
We will need to raise additional funding, which may not be available on acceptable terms, if at all to continue as a going concern and advance our current and any potential future product candidates. Failure to obtain capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
In addition, a clinical study may be suspended or terminated by us, our licensees, the FDA or other comparable authorities, the IRBs or ECs overseeing a clinical study, a data and safety monitoring board overseeing the clinical study, or other regulatory authorities due to a number of factors, including, among others: • failure to conduct the clinical study in accordance with regulatory requirements or clinical protocols; • inspection of the clinical study operations or study sites by the FDA or other regulatory authorities that reveals deficiencies or violations that require undertaking corrective action, including in response to the imposition of a clinical hold; • unforeseen safety issues, including any that could be identified in ongoing studies, adverse side effects or lack of effectiveness; • changes in government regulations or administrative actions; • problems with clinical supply materials; and • lack of adequate funding to continue clinical studies.
In addition, a clinical study may be suspended or terminated by us, our licensees, Tisento, the FDA or other comparable authorities, the IRBs or ECs overseeing a clinical study, a data and safety monitoring board overseeing the clinical study, or other regulatory authorities due to a number of factors, including, among others: • failure to conduct the clinical study in accordance with regulatory requirements or clinical protocols; • inspection of the clinical study operations or study sites by the FDA or other regulatory authorities that reveals deficiencies or violations that require undertaking corrective action, including in response to the imposition of a clinical hold; • unforeseen safety issues, including any that could be identified in ongoing studies, adverse side effects or lack of effectiveness; • changes in government regulations or administrative actions; • problems with clinical supply materials; and • lack of adequate funding to continue clinical studies. 23 Our product candidates may cause side effects or adverse events that are presented in the product labeling approved by regulatory authorities.
On June 1, 2022, the Company received a notice from the Nasdaq Stock Market ("Nasdaq") notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company's common stock listed on Nasdaq has been below the minimum $1.00 per share required for continued listing on the Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the "Bid Price Requirement").
On June 1, 2022, the Company received a notice from the Nasdaq Stock Market ("Nasdaq") notifying the Company that the closing bid price for the Company's common stock listed on Nasdaq has been below the minimum $1.00 per share required for continued listing on the Nasdaq Global Select Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the "Bid Price Requirement").
Many nations, including the United States, continue to implement mitigation measures, that have limited and may continue to limit our ability to access patients and physicians at certain local clinical centers that are participating in our development activities.
Many nations, including the United States, continue to implement mitigation measures, that have in the past and may in the future limit our ability to access patients and physicians at certain local clinical centers that are participating in any future development activities.
If we or our licensees, as applicable, are ultimately unable to obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed. A product candidate cannot be commercialized until the appropriate regulatory authorities have reviewed and approved the product candidate.
If we, Akebia and any other future licensees, as applicable, are ultimately unable to obtain regulatory approval for the product candidates, we will be unable to generate product revenue and our business will be substantially harmed. A product candidate cannot be commercialized until the appropriate regulatory authorities have reviewed and approved the product candidate.
Our future profitability may depend, in part, on our or a licensee's ability to commercialize our product candidates outside the United States for which we may rely on partnerships with third parties.
Our future profitability may depend, in part, on our or a licensee's ability to commercialize our current and any potential future product candidates outside the United States for which we may rely on partnerships with third parties.
Raising additional capital may dilute our existing shareholders, restrict our operations or cause us to relinquish valuable rights. There is substantial doubt regarding our ability to continue as a going concern. As of December 31, 2022, we had unrestricted cash and cash equivalents of approximately $13.4 million.
Raising additional capital may dilute our existing shareholders, restrict our operations or cause us to relinquish valuable rights. There is substantial doubt regarding our ability to continue as a going concern. As of December 31, 2023, we had unrestricted cash and cash equivalents of approximately $7.6 million.
Changes in regulatory requirements, FDA guidance or unanticipated events during our nonclinical studies and clinical studies of our product candidates may occur, which may result in changes to nonclinical or clinical study protocols or additional nonclinical or clinical study requirements, which could result in increased costs and could delay development timelines.
Changes in regulatory requirements, FDA guidance or unanticipated events during nonclinical studies and clinical studies of our product candidates, those licensed to Akebia and those sold to Tisento may occur, which may result in changes to nonclinical or clinical study protocols or additional nonclinical or clinical study requirements, which could result in increased costs and could delay development timelines.
The adverse effects that may occur from administration of COVID-19 vaccines to patients participating in our clinical trials may adversely affect our clinical trial outcomes or data analysis.
The adverse effects that may occur from administration of vaccines to patients participating in our future clinical trials could adversely affect clinical trial outcomes or data analysis.
Foreign Corrupt Practices Act, or the FCPA, and other worldwide anti-bribery laws. • Our failure to regain compliance with Nasdaq's continued listing requirements, could result in the delisting of our common stock. • We have limited trading history and a relatively low-volume trading market for our shares and our common stock market price may fluctuate widely. • We have adopted anti-takeover provisions in our articles of organization and bylaws and are subject to provisions of Massachusetts law that may frustrate any attempt to remove or replace our current board of directors or to effect a change of control or other business combination involving our company.
Foreign Corrupt Practices Act, or the FCPA, and other worldwide anti-bribery laws. • Any future failure to comply with Nasdaq’s continued listing requirements could result in the delisting of our common stock. 19 • We have limited trading history and a relatively low-volume trading market for our shares and our common stock market price may fluctuate widely. • We have adopted anti-takeover provisions in our articles of organization and bylaws and are subject to provisions of Massachusetts law that may frustrate any attempt to remove or replace our current board of directors or to effect a change of control or other business combination involving our company. • The COVID-19 pandemic and future pandemics may disrupt our business, including our development activities.
Effective November 25, 2022, the Company transferred its listing of the Company's common stock from the Nasdaq Global Market to the Nasdaq Capital Market, a continuous trading market that operates in substantially the same manner as the Nasdaq Global Market. The Company’s common stock continues to trade under the symbol “CYCN”.
Effective November 25, 2022, the Company transferred its listing of the Company's common stock from the Nasdaq Global Market to the Nasdaq Capital Market, a continuous trading market that operates in substantially the same manner as the Nasdaq Global Market.
Our business has incurred operating losses due to costs incurred in connection with our research and development activities and general and administrative expenses associated with our operations. Our net losses for the years ended December 31, 2022 and 2021 were $44.1 million and $51.6 million, respectively.
Our business has incurred operating losses due to costs incurred in connection with our research and development activities and general and administrative expenses associated with our operations. Our net losses for the years ended December 31, 2023 and 2022 were $5.3 million and $44.1 million, respectively.
We may be subject to damages resulting from claims that we or our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers. Our employees may have been previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.
We may be subject to damages resulting from claims that we or our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers. Our current employee and any employees we may hire in the future may have been previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.
Thus, any patents, should they issue, may not provide any protection against competitors. Furthermore, though a patent, if it were to issue, is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability and it may not provide adequate protection to exclude competitors from making similar products.
Furthermore, though a patent, if it were to issue, is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability and it may not provide adequate protection to exclude competitors from making similar products.
Risks Related to Our Reliance on Third Parties We may not succeed in our pursuit of capital, capabilities, and transactions for the development and commercialization of zagociguat and our other clinical stage assets, which would affect our financial condition. We are seeking capital, capabilities, and transactions to advance the development of zagociguat and our other clinical stage assets.
Risks Related to Our Reliance on Third Parties We may not succeed in our pursuit of capital, capabilities, and transactions for the development and commercialization of our future clinical stage assets, which would affect our financial condition.
Favorable results in earlier stage trials may not be replicated in later stage trials. If we fail to produce positive results in our clinical trials, the development timeline, regulatory approval and commercialization prospects of our assets and, correspondingly, our business and financial prospects, would be materially adversely affected. The COVID-19 pandemic continues to disrupt our business, including our development activities.
Favorable results in earlier stage trials may not be replicated in later stage trials. If we fail to produce positive results in our clinical trials, the development timeline, regulatory approval and commercialization prospects of our assets and, correspondingly, our business and financial prospects, would be materially adversely affected.
If we seek and are awarded orphan drug designation in the US and/or the EU based upon criteria in effect at the time, this designation may be rescinded if a similar drug or another therapy that confers a significant benefit over ours is subsequently approved.
If we, our licensees or Tisento seek and are awarded orphan drug designation in the US and/or the EU based upon criteria in effect at the time, this designation may be rescinded if a similar drug or another therapy that confers a significant benefit over these product candidates is subsequently approved.
In addition, if the patients enrolled in our clinical trials become infected with COVID-19, we may have more adverse events and deaths in our clinical trials as a result.
In addition, if the patients enrolled in any future clinical trials become infected with COVID-19 or other viruses, we may have more adverse events and deaths in our clinical trials as a result.
The development of CNS therapies presents unique challenges, including an imperfect understanding of the biology, the presence of the blood-brain barrier that can restrict the flow of drugs to the brain, a frequent lack of translatability of 21 nonclinical study results in subsequent clinical trials and dose selection, and the product candidate having an effect that may be too small to be detected using the outcome measures selected in clinical trials or if the outcomes measured do not reach statistical significance.
The development of drug therapies presents unique challenges., including an imperfect understanding of the biology, a frequent lack of translatability of nonclinical study results in subsequent clinical trials and dose selection, and the product candidate having an effect that may be too small to be detected using the outcome measures selected in clinical trials or if the outcomes measured do not reach statistical significance.
Under the agreement, Akebia is responsible for all research, development, regulatory, and commercialization activities for certain products. Cyclerion is eligible to receive up to $12 million upon the initiation of a phase 2 clinical trial.
Under the agreement, Akebia is responsible for all research, development, regulatory, and commercialization activities for certain products. Cyclerion is eligible to receive up to $12 million upon the initiation of a phase 2 clinical trial. Cyclerion is eligible to receive up to $585 million in total potential future development, regulatory, and commercialization milestone payments.
Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operating results.
Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operating results. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.
The PCT applications are filed under an international patent law treaty that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the 153 contracting states, followed by the process of entering national phase, which requires a separate application in each of the member states in which national patent protection is sought.
Patent families are filed either as utility US patents or under an international patent law treaty (PCT) that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the 157 contracting states, followed by the process of entering national phase, which requires a separate application in each of the member states in which national patent protection is sought.
We depend on third-party contract manufacturing organizations, or CMOs, for all our requirements of raw materials, drug substance and drug product for our future and/or ongoing nonclinical studies and clinical trials.
We expect to depend on third-party contract manufacturing organizations, or CMOs, for all our requirements of raw materials, drug substances and drug product for any future nonclinical studies and clinical trials.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are not a party to any material legal proceedings at this time. From time to time, we may be subject to various legal proceedings and claims, which may have a material adverse effect on our financial position or results of operations. Item 4. Mine Saf ety Disclosures. Not applicable. 46 PART II
Biggest changeItem 3. Legal Proceedings We are not a party to any material legal proceedings at this time. From time to time, we may be subject to various legal proceedings and claims, which may have a material adverse effect on our financial position or results of operations. Item 4. Mine Saf ety Disclosures. Not applicable. 51 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures. 46 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 47 Item 6. Selected Financial Data. 47 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 48
Biggest changeItem 4. Mine Safety Disclosures. 51 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 52 Item 6. Selected Financial Data. 52 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 53

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividend Policy We currently intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future.
Biggest changeDividend Policy We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future.
Market Information for Common Stock Our common stock is listed on the Nasdaq Capital Market under the symbol “CYCN.” Holders of Record As of February 9, 2023, we had 86 holders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers.
Market Information for Common Stock Our common stock is listed on the Nasdaq Capital Market under the symbol “CYCN.” Holders of Record As of February 29, 2024, we had 57 holders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe increase in net cash used in operations of $4.1 million primarily relates to the non-cash leasehold improvement write off of $6.3 million, non-cash loss on lease termination of $0.9 million in the prior year, a decrease of non-cash stock-based compensation and other non-cash items of $3.8 million in the current year and an increase in working capital accounts of $4.3 million, partially offset by a decrease in our net loss of $7.6 million and non-cash gain on extinguishment of debt for $3.6 million in the prior year.
Biggest changeThe decrease in net cash used in operations of $19.4 million primarily relates to a decrease of approximately $38.8 million in our net loss, which is in part due to an increase of approximately $15.8 million in gain on disposal of discontinued operations, a reduction of approximately $5.2 million in stock-based compensation and offset by an increase of approximately $3.3 million in impairment loss.
On June 3, 2021, we entered into a license agreement with Akebia relating to the exclusive worldwide license to Akebia of our rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing praliciguat and other related products and forms, thereof enumerated in such agreement.
On June 3, 2021, we entered into a license agreement with Akebia relating to the exclusive worldwide license to Akebia of our rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing praliciguat 53 and other related products and forms thereof enumerated in such agreement.
Any failure by us to obtain, or any delay in obtaining, regulatory approvals would materially adversely affect our product candidate development efforts and our business overall.
Any failure by us or our partners to obtain, or any delay in obtaining, regulatory approvals would materially adversely affect our product candidate development efforts and our business overall.
Under ASC 205-40, the future receipt of potential funding from future partnerships, equity or debt issuances, and the potential milestones from the Akebia agreement cannot be considered probable at this time because these plans are not entirely within the Company’s control and/or have not been approved by the Board of Directors as of the date of these consolidated financial statements.
Under ASC 205-40, the future receipt of potential funding from future partnerships, equity or debt issuances, and the potential milestones from the Akebia agreement cannot be considered probable at this time because these plans are not entirely within our control and/or have not been approved by the Board of Directors as of the date of these consolidated financial statements.
Our expenses will fluctuate, and our future funding requirements will depend on, and could increase or decrease significantly as a result of, many factors, including the: • scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials; • costs, timing and outcome of regulatory review of our product candidates; • costs of future activities, including medical affairs, manufacturing and distribution, for any of our product candidates for which we receive marketing approval; • cost and timing of necessary actions to support our strategic objectives; • costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; and • timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or future product candidates, if any.
Our expenses will fluctuate, and our future funding requirements will depend on, and could increase or decrease significantly as a result of many factors, including the: • scope, progress, results and costs of researching and developing our current and any potential future product candidates, and any preclinical studies and clinical trials we may conduct; • costs, timing and outcome of regulatory review of any current and any potential future product candidates; • costs of future activities, including medical affairs, manufacturing and distribution, of any current or potential future product candidates for which we receive marketing approval; • cost and timing of necessary actions to support our strategic objectives; • costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; and • timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or potential future product candidates, if any.
This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern.
This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of our plans sufficiently alleviates substantial doubt about our ability to continue as a going concern.
General and administrative expense consists primarily of compensation, benefits and other employee-related expenses for personnel in our administrative, finance, legal, information technology, business development, and human resource functions. Other costs include the legal costs of pursuing patent protection of our intellectual property, general and administrative related facility costs, insurance costs and professional fees for accounting and legal services.
General and administrative expenses consist primarily of compensation, benefits and other employee-related expenses for personnel in our administrative, finance, legal, information technology, business development, and human resource functions. Other costs include the legal costs of pursuing patent protection of our intellectual property, general and administrative related facility costs, insurance 54 costs and professional fees for accounting and legal services.
In performing its analysis, management excluded certain elements of its operating plan that cannot be considered probable.
In performing our analysis, management excluded certain elements of our operating plan that cannot be considered probable.
We anticipate that our principal uses of cash in the future will be primarily to fund our operations, working capital needs, capital expenditures and other general corporate purposes. On December 31, 2022, we had approximately $13.4 million of unrestricted cash and cash equivalents. Our cash equivalents include amounts held in U.S. government money market funds.
We anticipate that our principal uses of cash in the future will be primarily to fund our operations, working capital needs, capital expenditures and other general corporate purposes. 56 On December 31, 2023, we had approximately $7.6 million of unrestricted cash and cash equivalents. Our cash equivalents include amounts held in U.S. government money market funds.
If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, as to which raise there can be no assurances, we may have to relinquish rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.
As a result of many factors, such as those referenced or set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Item 1A of this Annual Report on Form 10‑K, our actual results may differ materially from those anticipated in these forward‑looking statements.
As a result of many factors, such as those referenced or set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Item 1A of this Annual Report on Form 10‑K, our actual results may differ materially from those anticipated in these forward‑looking statements. Overview We operate in one reportable business segment—human therapeutics.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. Item 8. Financial Statement s and Supplementary Data.
The following table summarizes our research and development expenses, employee and facility related costs allocated to research and development expense, and discovery and pre-clinical phase programs, for the years 49 ended December 31, 2022 and 2021. The product pipeline expenses relate primarily to external costs associated with nonclinical studies and clinical trial costs, which are presented by development candidates.
The following table summarizes our research and development expenses of continuing operations, employee and facility related costs allocated to research and development expense, and discovery and pre-clinical phase programs, for the years ended December 31, 2023 and 2022. The product pipeline expenses related primarily to external costs associated with nonclinical studies and clinical trial costs.
The Company intends to use the proceeds to fund working capital and other general corporate purposes. Our ability to continue to fund our operations and meet capital needs will depend on our ability to generate cash from operations and access to capital markets and other sources of capital, as further described below.
Our ability to continue to fund our operations and meet capital needs will depend on our ability to generate cash from operations and access to capital markets and other sources of capital, as further described below.
Interest and other (expenses) income, net increased by approximately $0.3 million for the year ended December 31, 2022, compared to the year ended December 31, 2021 due to the increase of approximately $0.3 million in interest income driven by higher interest rates in the current year as compared to the prior year.
Interest and other income increased by approximately $0.1 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 due to an increase of approximately $0.1 million in interest income driven by higher interest rates.
Contractual Commitments and Obligations Tax-related Obligations We exclude assets, liabilities or obligations pertaining to uncertain tax positions from our summary of contractual commitments and obligations as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities. As of December 31, 2022, we had no uncertain tax positions.
If we are unable to raise funds, we may need to cease operations. Contractual Commitments and Obligations Tax-related Obligations We exclude assets, liabilities or obligations pertaining to uncertain tax positions from our contractual commitments and obligations as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.
Cash Flows The following is a summary of cash flows for the years ended December 31, 2022 and 2021: Year Ended December 31, Change 2022 2021 $ % (dollars in thousands) Net cash used in operating activities $ (40,611 ) $ (36,517 ) $ (4,094 ) 11 % Net cash provided by investing activities $ — $ 1,457 $ (1,457 ) (100 )% Net cash provided by financing activities $ 29 $ 30,785 $ (30,756 ) (100 )% Cash Flows from Operating Activities Net cash used in operating activities was $40.6 million for the year ended December 31, 2022 compared to $36.5 million for the year ended December 31, 2021.
Cash Flows The following is a summary of cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 $ % (dollars in thousands) Net cash used in operating activities $ (21,245 ) $ (40,611 ) $ 19,366 (48 )% Net cash provided by investing activities $ 10,402 $ — $ 10,402 — Net cash provided by financing activities $ 5,024 $ 29 $ 4,995 100 % 57 Cash Flows from Operating Activities Net cash used in operating activities was $21.2 million for the year ended December 31, 2023 compared to $40.6 million for the year ended December 31, 2022.
Because of the many risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.
Failure to obtain necessary capital when needed may delay development of any current or potential future product candidates, or other operations. Because of the many risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.
Cyclerion is eligible to receive up to $225 million in pre-commercial milestones and total potential future development, regulatory, and commercialization milestone payments could result in up to $585 million. Cyclerion is also eligible to receive tiered, sales-based royalties ranging from single-digit to high-teen percentages.
Cyclerion is eligible to receive up to $585 million in total potential future development, regulatory, and commercialization milestone payments. Cyclerion is also eligible to receive tiered, sales-based royalties ranging from single-digit to high-teen percentages and subject to reduction upon expiration of patent rights or the launch of a generic product.
A change in any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing of the development of that product candidate. 55 Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances or licensing arrangements with third parties.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances 58 or licensing arrangements with third parties, of which there can be no assurance.
The decrease in general and administrative expenses of approximately $6.1 million for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily driven by decreases of approximately $2.3 million in non-cash stock-based compensation, approximately $1.0 million in salaries and other employee-related costs, approximately $2.1 million in facilities and operating costs related to a non-cash write-off of leasehold improvements related to the Termination Agreement in 2021, and approximately $0.7 million in professional services expense.
The decrease in general and administrative expenses of approximately $4.7 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by decreases of approximately $3.7 million in salaries and other employee-related expenses including non-cash stock-based compensation, approximately $0.4 million in amortization of insurance policies, approximately $0.3 million in board member fees and approximately $0.3 million in rent expenses.
The decrease in revenue of approximately $2.3 million for the year ended December 31, 2022, compared to the year ended December 31, 2021, can be attributed to receiving $3.0 million in revenue from the Akebia License Agreement in 2021 (see Note 13), and offset by approximately $0.7 million in revenue associated with the PTC Grant (see Note 14).
The decrease in revenue of approximately $0.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be attributed to approximately $0.3 million of revenue generated from the Akebia Supply Agreement in the year ended December 31, 2022.
Funding Requirements We expect our expenses to fluctuate as we engage in preclinical activities and clinical trials of our product candidates, continue to maintain out-license opportunities and seek to broaden our portfolio through in-licensing of complementary CNS assets.
There was a de minimis amount of financing activity in the year ended December 31, 2022. Funding Requirements We expect our expenses to fluctuate as we continue to maintain out-license opportunities and seek to broaden our portfolio through in-licensing of complementary CNS assets.
As a result of these uncertainties surrounding the timing and outcome of any approvals, we are currently unable to estimate precisely when, if ever, our discovery and development candidates will be approved. We invest carefully in our pipeline, and the commitment of funding for each subsequent stage of our development programs is dependent upon the receipt of clear, supportive data.
As a result of these uncertainties surrounding the timing and outcome of any approvals, we are currently unable to estimate precisely when, if ever, our discovery and development candidates will be approved. The successful development of any current or potential future product candidates is highly uncertain and subject to a number of risks.
The Company has incurred recurring losses since its inception, including a net loss of $44.1 million for the year ended December 31, 2022. In addition, as of December 31, 2022, the Company had an accumulated deficit of $259.2 million. The Company expects to continue to generate operating losses for the foreseeable future.
We have incurred recurring losses since our inception, including a net loss of $5.3 million for the year ended December 31, 2023. In addition, as of December 31, 2023, we had an accumulated deficit of $264.4 million.
Olinciguat is an orally administered, once-daily, vascular sGC stimulator that was evaluated in a Phase 2 study of participants with sickle cell disease. We released topline results from this study in October 2020. We continue to work to out-license olinciguat to an entity with strong cardiovascular and/or cardiopulmonary capabilities.
Olinciguat is a Phase 2, orally administered, once-daily, vascular sGC stimulator that we are seeking to out-license to an entity with strong cardiovascular and/or cardiopulmonary capabilities. Zagociguat and CY3018 are orally administered CNS-penetrant sGC stimulators.
The decrease in research and development expenses of approximately $6.1 million for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily driven by a decrease of approximately $1.0 million in non-cash stock-based compensation, a decrease of approximately $2.6 million in the Company's reduced total leased premises, approximately $4.2 million related to a non-cash write-off of leasehold improvements related to the Termination Agreement in 2021, and approximately $0.7 million in salaries and other employee-related costs, partially offset by an increase of approximately $0.4 million related to workforce reduction costs, and approximately $2.0 million in external research costs.
The decrease in research and development expenses of approximately $4.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 was driven by decreases of approximately $3.0 million in salaries and other employee-related expenses including non-cash stock-based compensation, approximately $0.2 million in information technology services, approximately $0.3 million in consulting and outside service fee and approximately $0.7 million in external research costs related to discovery research.
However, there can be no assurance that the Company will be able to regain compliance with the Bid Price Requirement, would receive sufficient shareholder support for a reverse stock split, or will otherwise be in compliance with other Nasdaq Listing Rules. 53 Going Concern The Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
Going Concern We evaluated whether there are conditions and events, considered in the aggregate, which raise substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
There can be no assurances that the Company will retain or seek to utilize this facility. On June 7, 2021, we closed on a private placement of our 5,735,988 shares of common stock, pursuant to a Common Stock Purchase Agreement, for total gross proceeds of approximately $18 million. There were no material fees or commissions related to the transaction.
On May 19, 2023, we sold 225,000 shares of our common stock, pursuant to a Common Stock Purchase Agreement, and 351,037 shares of Series A Preferred Stock, to our former CEO, for total gross proceeds of approximately $5 million. There were no material fees or commissions related to the transaction.
Year Ended December 31, 2022 2021 (in thousands) Product pipeline external costs: Zagociguat $ 13,629 $ 12,396 CY3018 4,009 3,310 Discovery research 663 551 Total product pipeline external costs 18,301 16,257 Personnel and related internal costs 10,237 11,374 Facilities and other 2,955 10,005 Total research and development expenses $ 31,493 $ 37,636 Securing regulatory approvals for new drugs is a lengthy and costly process.
Year Ended December 31, 2023 2022 (in thousands) Product pipeline external costs $ 29 $ 654 Personnel and related internal costs 581 3,546 Facilities and other 905 1,779 Total research and development expenses $ 1,515 $ 5,979 Securing regulatory approvals for new drugs is a lengthy and costly process.
We operate in one reportable business segment—human therapeutics. Financial Overview Research and Development Expense. Research and development expenses are incurred in connection with the discovery and development of our product candidates. These expenses consist primarily of the following costs: compensation, benefits and other employee-related expenses, research and development related facilities, third-party contracts relating to nonclinical study and clinical trial activities.
These expenses consist primarily of the following costs: compensation, benefits and other employee-related expenses, research and development related facilities, third-party contracts relating to manufacturing, nonclinical studies, clinical trial activities. All research and development expenses are charged to operations as incurred. Praliciguat is an orally administered, once-daily systemic sGC stimulator.
The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2022 will not be sufficient to fund operations for at least the next twelve months from the date of issuance of these consolidated financial statements and the Company will need to obtain additional funding.
We expect that our cash, cash equivalents and marketable securities as of December 31, 2023, will be sufficient to fund operations through the first quarter of 2025, however we will need to obtain additional funding to sustain operations as we expect to continue to generate operating losses for the foreseeable future.
Cash Flows from Investing Activities Net cash provided by investing activities was $1.5 million from cash received from sale of lab equipment in 2021. 54 Cash Flows from Financing Activities Net cash provided by financing activities of $30.8 million for the year ended December 31, 2021 was related to the June 2021 Equity Private Placement of $18 million, net proceeds from the ATM Offering of $12.5 million and proceeds from ESPP shares of $0.3 million.
There was no investing activity incurred during the year ended December 31, 2022. Cash Flows from Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 of $5.0 million was due to cash received from the May 2023 stock purchase agreement of $5.0 million.
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Overview We are a clinical-stage biopharmaceutical company on a mission to develop treatments for serious diseases.
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At inception, Cyclerion was a biopharmaceutical company focused on the treatment of serious diseases with novel soluble guanylate cyclase (“sGC”) stimulators in both the central nervous system (“CNS”) and the periphery. The nitric oxide (“NO”) sGC cyclic guanosine monophosphate (“cGMP”) signaling pathway is a fundamental mechanism that precisely controls key aspects of physiology throughout the body.
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Zagociguat is a pioneering CNS-penetrant sGC stimulator that has shown rapid improvements across a range of endpoints reflecting multiple domains of disease activity, including mitochondrial disease-associated biomarkers. sGC stimulators are small molecules that act synergistically with NO as positive allosteric modulators of sGC to boost production of cGMP. cGMP is a key second messenger that, when produced by sGC, regulates diverse and critical biological functions such as mitochondrial function, neuronal function, inflammation and vascular dynamics.
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The NO-sGC-cGMP pathway regulates diverse and critical biological functions in both the CNS and the periphery and has been successfully targeted with several drugs. Prior to the sale of two assets to Tisento (see below), Cyclerion’s portfolio included novel sGC stimulators that modulate signaling networks in both the CNS and the periphery.
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All research and development expenses are charged to operations as incurred. Zagociguat is an orally administered CNS-penetrant sGC stimulator. NO-sGC-cGMP is a fundamental signaling network, including in the brain where it is critical to basic CNS functions. Deficient NO-sGC-cGMP signaling is believed to play an important role in the pathogenesis of many neurological disorders.
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On July 28, 2023, we sold two of our CNS assets (zagociguat and CY3018, or the “Transferred Assets”) to Tisento in exchange for $8.0 million in cash consideration, $2.4 million as reimbursement for certain operating expenses related to zagociguat and CY3018 for the period between signing and closing of the transaction, and 10% of all of Tisento's parent's outstanding equity securities.
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As an sGC stimulator, zagociguat amplifies endogenous NO signaling by acting as a positive allosteric modulator to sensitize the sGC enzyme to NO, and increase the production of cGMP. By compensating for deficient NO-sGC-cGMP signaling, zagociguat may have broad therapeutic potential as a treatment for people with serious diseases.
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The Cyclerion assets that were retained are olinciguat and praliciguat which are not CNS focused and are either currently out-licensed (praliciguat) or management plans to out-license (olinciguat). We have shifted our strategy to identify non-sGC stimulator assets, within the CNS therapeutic area, to build a new portfolio.
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In January 2020, we announced positive results from our Phase 1 first-in-human study that provided the first clinical data supporting the development of zagociguat. The results from this study indicate that zagociguat was well tolerated.
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If the Company identifies suitable new assets the Company will seek to develop the new assets and retain contract research, development and manufacturing organizations for these specific purposes, as well as seek to raise funds for further research and development activities in a fit for purpose way.
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Pharmacokinetic data, obtained from both blood and cerebral spinal fluid, support once-daily dosing with or without food and demonstrated zagociguat penetration of the blood-brain-barrier with concentrations in the CSF expected to be pharmacologically active. In October 2020, we announced positive topline results from our zagociguat Phase 1 translational pharmacology study in healthy elderly participants.
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The Company’s goal is to find the best combination of capital, capabilities, and transactions that will enable the advancement of current and any future assets the Company may acquire for patients in a way that maximizes shareholder value.
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Treatment with zagociguat for 15 days in this 24-subject study confirmed and extended results seen in the earlier first-in-human Phase 1 study: once-daily oral treatment demonstrated blood-brain-barrier penetration with expected CNS exposure and target engagement. Results also showed significant improvements in neurophysiological and objective performance measures as well as decreases in inflammatory biomarkers associated with aging and neurodegenerative diseases.
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Cyclerion continues to evaluate other activities aimed at enhancing shareholder value, which may potentially include collaborations, licenses, mergers, acquisitions and/or other targeted investments. Financial Overview Research and Development Expense. Research and development expenses are incurred in connection with the discovery and development of our product candidates.
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Zagociguat was safe and generally well tolerated in the study. These results, together with nonclinical data, support continued development of zagociguat as a potential new medicine for serious CNS diseases. 48 In June 2022, we announced positive topline clinical data for zagociguat in our signal-seeking clinical study for the potential treatment of MELAS.
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On July 28, 2023, Tisento purchased zagociguat and CY3018 in exchange for $8.0 million in cash consideration, $2.4 million as reimbursement for certain operating expenses related to zagociguat and CY3018 for the period between signing and closing of the transaction, and 10% of all of Tisento Parent's outstanding equity securities at the time of closing.
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In this open-label, single-arm study of the oral, once-daily sGC stimulator in eight adults aged 18 or older with MELAS, improvements were seen across a range of endpoints reflecting multiple domains of disease activity, including mitochondrial disease-associated biomarkers such as lactate and GDF-15, a broad panel of inflammatory biomarkers, cerebral blood flow, and functional connectivity between neural networks.
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Cyclerion continues to evaluate other activities aimed at enhancing shareholder value, which may potentially include collaborations, licenses, mergers, acquisitions, and/or other targeted investments.
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These positive effects after 29 days of dosing were supported by correlations among several endpoints with each other and with zagociguat plasma concentrations. Zagociguat was well tolerated with no serious or severe adverse events and no events leading to discontinuation. Pharmacokinetics were consistent with the Phase 1 studies in healthy volunteers.
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Please refer to Item 1A, Risk Factors , in this Annual Report on Form 10-K.
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The positive data from this study supports the potential of zagociguat to provide therapeutic benefit to people living with mitochondrial diseases, including MELAS. In July 2022, we announced positive topline data from our signal-seeking clinical study of zagociguat for the potential treatment of CIAS.
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We are unable to determine the duration and costs to complete current or future nonclinical and clinical stages of any current or potential future product candidates, including as licensed to third parties, or when, or to what extent, we may generate revenues from the commercialization and sale of any current or potential future product candidates.
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Data from the 14-day, double blind, randomized, placebo-controlled, multiple-ascending-dose study in 48 adults aged 18-50 with stable schizophrenia on a stable, single, atypical antipsychotic regimen demonstrated that once-daily zagociguat was safe and well tolerated, with no reports of serious adverse events, severe adverse events, or treatment discontinuation due to adverse events.
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Revenues and Expenses Year Ended December 31, Change 2023 2022 $ % (dollars in thousands) Revenues: Revenue from development agreement $ — $ 297 $ (297 ) 100 % Total revenues — 297 (297 ) (100 )% Cost and expenses: Research and development 1,515 5,979 (4,464 ) (75 )% General and administrative 8,132 12,858 (4,726 ) (37 )% Impairment loss 3,304 — 3,304 100 % Total cost and expenses 12,951 18,837 (5,886 ) (31 )% Loss from operations (12,951 ) (18,540 ) 5,589 (30 )% Interest and other income, net 358 294 64 22 % Net loss from continuing operations (12,593 ) (18,246 ) 5,653 (31 )% Discontinued operations: Gain (loss) from discontinued operations 7,330 (25,832 ) 33,162 (128 )% Net loss $ (5,263 ) $ (44,078 ) $ 38,815 (88 )% Revenues .
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We further announced that study data demonstrated a strong effect on cognitive performance after two weeks of 15mg once-daily dosing and that positive movement on inflammatory biomarkers was also observed.
Added
There is no revenue recognized related to the Akebia Supply Agreement in the year ended December 31, 2023. 55 Research and development expenses.
Removed
These signals on exploratory endpoints are consistent with the pro-cognitive and anti-inflammatory effects of zagociguat observed in preclinical studies and prior clinical trials and support the further development of oral, once-daily zagociguat. In October 2022, the WHO International Nonproprietary Names committee and the United States Adopted Name Council selected zagociguat as a nonproprietary name for CY6463.
Added
Impairment loss. The impairment loss consists of an impairment loss of operating lease of approximately $3.3 million during the year ended December 31, 2023. There was no impairment loss recognized during the year ended December 31, 2022. Gain (loss) from discontinued operations. The operations related to the Transferred Assets to Tisento are presented as discontinued operations for all periods presented.
Removed
In October 2022, we announced that we had recently capped enrollment in our signal-seeking clinical study of zagociguat for the potential treatment of ADv, to enable the Company to channel its resources to its most urgent priorities in MELAS. Data from the ADv study are expected in the first half of 2023.
Added
The increase in gain from discontinued operations of approximately $33.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 was driven by the one-time gain of sale of approximately $15.8 million, and approximately $21.1 million decrease of research and development expense, offset by $2.4 million increase in general and administrative expenses due to closing and transaction costs related to the disposal incurred during the year ended December 31, 2023.
Removed
The ADv study is supported in part by a $2 million grant from the Alzheimer's Association’s Part the Cloud-Gates Partnership Grant Program (the "PTC Grant").
Added
The decrease in research and development expense included approximately $14.9 million decrease in external research costs in related to zagociguat clinical trials and CY3018 costs, approximately $4.9 million decrease in salaries and other employee-related expenses and approximately $1.3 million decrease in consulting expense. Interest and other income, net.
Removed
In March 2023, we announced that given the significant capital and capabilities necessary to ensure that the MELAS Phase 2b study is executed efficiently and with the highest quality, and the currently unfavorable capital market conditions, we are actively evaluating the best combination of capital, capabilities, and transactions available to us to advance the development of zagociguat and our other clinical development candidates and to maximize shareholder value.
Added
Liquidity and Capital Resources On July 24, 2020, the Company filed a Registration Statement on Form S-3 (the “Shelf”) with the Securities and Exchange Commission (the “SEC”) in relation to the registration of common stock, preferred stock, debt securities, warrants and units of any combination thereof for an aggregate initial offering price not to exceed $150.0 million.
Removed
CY3018 is a CNS-targeted sGC stimulator in preclinical development that preferentially localizes to the brain and has a pharmacology profile that suggests its potential for the treatment of neuropsychiatric diseases and disorders. Praliciguat is an orally administered, once-daily systemic sGC stimulator.
Added
On September 3, 2020, we entered into the Sales Agreement with Jefferies with respect to the ATM Offering under the Shelf. The Shelf expired in July 2023. We did not sell any shares of our common stock under the Shelf in 2022 or 2023.
Removed
The successful development of our product candidates is highly uncertain and subject to a number of risks including, but not limited to: • The continuing impact of COVID-19, which could continue to adversely affect our programs and operations, including our development activities, corporate development, and other activities. • Cyclerion works closely with its clinical trial sites and investigators to deliver trials in a manner consistent with the safety of study participants and healthcare professionals. • The duration of clinical trials may vary substantially according to the type and complexity of the product candidate and may take longer than expected. • There is substantial doubt regarding our ability to continue as a going concern.
Added
Such Series A Convertible Preferred Stock is convertible into shares of our common stock on a one-to-one basis. Our shareholders approved such convertibility on July 19, 2023.
Removed
We will need to raise additional funding, which may not be available on acceptable terms, or if at all.
Added
On July 28, 2023, we closed the transactions contemplated by the Asset Purchase Agreement receiving proceeds of $8.0 million as cash consideration, approximately $2.4 million as reimbursement for certain operating expenses related to zagociguat and CY3018 programs for the period between signing and closing of the transaction, and 10% of all of Tisento Parent’s outstanding equity securities.
Removed
Failure to obtain necessary capital may force us to delay, limit or terminate our development efforts or other operations. • The United States FDA and comparable agencies outside the United States impose substantial and varying requirements on the introduction of therapeutic pharmaceutical products, which typically require lengthy and detailed laboratory and clinical testing procedures, sampling activities and other costly and time-consuming procedures. • Data obtained from nonclinical and clinical activities at any step in the testing process may be adverse and lead to discontinuation or redirection of development activity.
Added
Reverse Stock Split On May 15, 2023, we filed Articles of Amendment to our Restated Articles of Organization with the Secretary of Commonwealth of Massachusetts to effect a 1-for-20 reverse stock split of our issued and outstanding shares of common stock.
Removed
Data obtained from these activities also are susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. • The duration and cost of discovery, nonclinical studies and clinical trials may vary significantly over the life of a product candidate and are difficult to predict. • The costs, timing and outcome of regulatory review of a product candidate may not be favorable, and, even if approved, a product may face post-approval development and regulatory requirements. • The emergence of competing technologies and products and other adverse market developments may reduce or eliminate the potential value of our pipeline. 50 As a result of the factors listed above, including the factors discussed under the “Risk Factors” section in Item 1A of this Annual Report on Form 10-K, we are unable to determine the duration and costs to complete current or future nonclinical and clinical stages of our product candidates, including as licensed to third parties, or when, or to what extent, we may generate revenues from the commercialization and sale of our product candidates.
Added
The reverse stock split was reflected on the Nasdaq Capital Market beginning with the opening of trading on May 16, 2023. All share amounts and per share amounts disclosed in this Annual Report on Form 10-K have been adjusted retroactively to reflect the reverse stock split for all periods presented.
Removed
Revenues and Expenses 51 Year Ended December 31, Change 2022 2021 $ % (dollars in thousands) Revenues: Revenue from license agreement $ — $ 3,000 $ (3,000 ) (100 )% Revenue from development agreement 297 320 (23 ) (7 )% Revenue from grants 1,328 622 706 114 % Total revenues 1,625 3,942 (2,317 ) (59 )% Cost and expenses: Research and development 31,493 37,636 (6,143 ) (16 )% General and administrative 14,504 20,620 (6,116 ) (30 )% Loss on lease termination — 881 (881 ) (100 )% Total cost and expenses 45,997 59,137 (13,140 ) (22 )% Loss from operations (44,372 ) (55,195 ) 10,823 (20 )% Gain on Extinguishment of Debt — 3,564 (3,564 ) (100 )% Interest and other income (expenses), net 294 (16 ) 310 (1938 )% Net loss $ (44,078 ) $ (51,647 ) $ 7,569 (15 )% Revenues .
Added
Change in working capital accounts resulted in an approximately $1.8 million use of cash. Cash Flows from Investing Activities Net cash provided by investing activities for the year ended December 31, 2023 of $10.4 million was due to cash proceeds received from the disposal of discontinued operations of approximately $10.4 million.

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