UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☐ Accelerated Filer ☐Smaller Reporting Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes
The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of the close of business on August 7, 2024 was
GLYCOMIMETICS, INC.
INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GLYCOMIMETICS, INC.
Balance Sheets
June 30, | December 31, |
| |||||
2024 | 2023 |
| |||||
Assets |
| (Unaudited) |
| ||||
Current assets: | |||||||
Cash and cash equivalents | $ | | $ | | |||
Prepaid expenses and other current assets |
| |
| | |||
Total current assets |
| |
| | |||
Prepaid research and development expenses |
| — |
| | |||
Operating lease right-of-use asset | | | |||||
Other assets | |
| | ||||
Total assets | $ | | $ | | |||
Liabilities & stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | | $ | | |||
Accrued expenses |
| |
| | |||
Lease liabilities |
| |
| | |||
Total current liabilities |
| |
| | |||
Lease liabilities, net of current portion | — | | |||||
Total liabilities |
| |
| | |||
Stockholders’ equity: | |||||||
Preferred stock; $ |
|
| |||||
Common stock; $ |
| |
| | |||
Additional paid-in capital |
| |
| | |||
Accumulated deficit |
| ( |
| ( | |||
Total stockholders’ equity |
| |
| | |||
Total liabilities and stockholders’ equity | $ | | $ | |
The accompanying notes are an integral part of the unaudited financial statements.
3
GLYCOMIMETICS, INC.
Unaudited Statements of Operations and Comprehensive Loss
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||
Costs and expenses: | |||||||||||||
Research and development expense | $ | | $ | |
| |
| | |||||
General and administrative expense |
| |
| |
| |
| | |||||
Total costs and expenses |
| |
| |
| |
| | |||||
Loss from operations |
| ( |
| ( |
| ( |
| ( | |||||
Interest income |
| |
| |
| |
| | |||||
Net loss and comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Basic and diluted net loss per common share | $ | ( | $ | ( | $ | ( | $ | ( | |||||
Basic and diluted weighted-average number of common shares outstanding |
| |
| |
| |
| |
The accompanying notes are an integral part of the unaudited financial statements.
4
GLYCOMIMETICS, INC.
Unaudited Statements of Stockholders’ Equity
Additional | Total | |||||||||||||
Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||
Balance at December 31, 2023 |
| | $ | | $ | | $ | ( | $ | | ||||
Issuance of common stock for services | | | | — | | |||||||||
Exercise of options and vesting of restricted stock units |
| |
| |
| |
| — |
| | ||||
Stock-based compensation |
| — |
| — |
| |
| — |
| | ||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balance at March 31, 2024 |
| |
| |
| |
| ( |
| | ||||
Issuance of common stock for services |
| |
| |
| |
| — |
| | ||||
Exercise of options and vesting of restricted stock units |
| |
| |
| |
| — |
| | ||||
Stock-based compensation |
| — |
| — |
| |
| — |
| | ||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balance at June 30, 2024 |
| | $ | | $ | | $ | ( | $ | | ||||
Additional | Total | |||||||||||||
Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||
Shares | Amount | Capital | Deficit | Equity | ||||||||||
Balance at December 31, 2022 |
| | $ | | $ | | $ | ( | $ | | ||||
Issuance of common stock, net of issuance costs | | | | — | | |||||||||
Common stock issued under stock plans |
| |
| |
| |
| — |
| | ||||
Stock-based compensation |
| — |
| — |
| |
| — |
| | ||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balance at March 31, 2023 |
| |
| |
| |
| ( |
| | ||||
Common stock issued under stock plans |
| |
| |
| |
| — |
| | ||||
Stock-based compensation |
| — |
| — |
| |
| — |
| | ||||
Net loss |
| — |
| — |
| — |
| ( |
| ( | ||||
Balance at June 30, 2023 |
| | $ | | $ | | $ | ( | $ | |
The accompanying notes are an integral part of the unaudited financial statements.
5
GLYCOMIMETICS, INC.
Unaudited Statements of Cash Flows
Six Months Ended June 30, | |||||||
| 2024 |
| 2023 | ||||
Operating activities | |||||||
Net loss | $ | ( | $ | ( | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation |
| |
|
| | ||
Non-cash lease expense | | | |||||
Issuance of common stock for services | | — | |||||
Stock-based compensation |
| |
| | |||
Changes in assets and liabilities: |
|
| |||||
Prepaid expenses and other current assets |
| |
| | |||
Prepaid research and development expenses | | — | |||||
Accounts payable |
| |
| ( | |||
Accrued expenses |
| ( |
| ( | |||
Lease liabilities | ( | ( | |||||
Net cash used in operating activities |
| ( |
| ( | |||
Investing activities | |||||||
Purchases of property and equipment |
| ( |
| ( | |||
Net cash used in investing activities |
| ( |
| ( | |||
Financing activities | |||||||
Proceeds from issuance of common stock, net of issuance costs |
| — |
| | |||
Proceeds from exercise of stock options |
| |
| | |||
Net cash provided by financing activities |
| |
| | |||
Net change in cash and cash equivalents |
| ( |
| | |||
Cash and cash equivalents, beginning of period |
| |
| | |||
Cash and cash equivalents, end of period | $ | | $ | | |||
|
The accompanying notes are an integral part of the unaudited financial statements.
6
GLYCOMIMETICS, INC.
Notes to Unaudited Financial Statements
1. Description of the Business
GlycoMimetics, Inc. (the Company), a Delaware corporation headquartered in Rockville, Maryland, was incorporated in 2003. The Company is focused on improving the lives of people living with cancer and inflammatory diseases by leveraging the inhibition of carbohydrate interactions that occur on the surface of cells. The Company has been developing a pipeline of proprietary glycomimetics, which are small molecules that mimic the structure of carbohydrates involved in important biological processes, to inhibit disease-related functions of carbohydrates such as the roles they play in cancers and inflammation. In July 2024, following feedback from the U.S. Food and Drug Administration (FDA), the Company determined that the regulatory path forward for its lead product candidate, uproleselan, for the treatment of relapsed and refractory acute myeloid leukemia would require an additional clinical trial. As a result, the Company intends to conduct a strategic review of its business, in an effort to maximize shareholder value, including the evaluation of potential business development opportunities for uproleselan and the Company’s GMI-1687 to ensure their continued advancement. In order to conserve its cash resources, in July 2024 the Company reduced its workforce by approximately
2. Going Concern
The accompanying unaudited financial statements have been prepared assuming that the Company will continue as a going concern within one year after the date that the financial statements are issued. During 2023, the Company incurred a net loss of $
The Company’s ability to fund its operations is dependent upon management’s plans, which include reducing operating expenses and potentially entering into collaborations, strategic alliances and marketing, distribution or licensing arrangements in order to raise additional capital. There can be no assurances that any strategic transactions will be available to the Company on commercially acceptable terms, or at all. Also, any collaborations, strategic alliances and marketing, distribution or licensing arrangements may require the Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full potential value of such rights. If the Company is unable to obtain additional capital or enter into a strategic transaction, the Company will need to eliminate some or all of its operations and may seek to liquidate.
The accompanying financial statements do not include any adjustments that might be necessary if the Company is not able to continue as a going concern.
3. Significant Accounting Policies
There have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the United States Securities and Exchange Commission (the SEC) on March 27, 2024 (the Form 10-K).
7
Basis of Accounting
The accompanying unaudited financial statements were prepared based on the accrual method of accounting in accordance with U.S. generally accepted accounting principles (GAAP).
Unaudited Financial Statements
The accompanying balance sheet as of June 30, 2024, statements of operations and comprehensive loss and stockholders’ equity for the three and six months ended June 30, 2024 and 2023 and statements of cash flows for the six months ended June 30, 2024 and 2023 are unaudited. These unaudited financial statements have been prepared in accordance with the rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements. These unaudited financial statements should be read in conjunction with the audited financial statements and the accompanying notes for the year ended December 31, 2023 contained in the Form 10-K. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management reflect all adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position as of June 30, 2024 and its results of operations and changes in its stockholders’ equity for the three and six months ended June 30, 2024 and 2023 and its cash flows for the six months ended June 30, 2024 and 2023. The December 31, 2023 balance sheet included herein was derived from audited financial statements, but does not include all disclosures including notes required by GAAP for complete annual financial statements. The financial data and other information disclosed in these notes to the financial statements related to the three and six months ended June 30, 2024 and 2023 are unaudited. Interim results are not necessarily indicative of results for an entire year or for any future period.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Although actual results could differ from those estimates, management does not believe that such differences would be material.
Fair Value Measurements
The Company had
Concentration of Credit Risk
Credit risk represents the risk that the Company would incur a loss if counterparties failed to perform pursuant to the terms of their agreements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash balances with financial institutions in federally insured accounts and has cash balances in excess of the insurance limits. Cash equivalents consist of investment in United States government money market funds with major financial institutions. These deposits and funds may be redeemed upon demand and the Company does not anticipate any losses on such balances. The Company has not experienced any losses to date and believes that it is not exposed to any significant credit risk on cash and cash equivalents.
Revenue Recognition
The Company applies Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers (Topic 606), to all contracts with customers, except for contracts that are within the scope of other standards,
8
such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods and services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with the customer(s); (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract that falls under the scope of Topic 606, determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
The Company enters into licensing agreements which are within the scope of Topic 606, under which it licenses certain of its drug candidates’ rights to third parties. The terms of these arrangements typically include payment of one or more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; and royalties on net sales of the licensed product, if and when earned. See Note 10 for additional information regarding the Company’s license agreements.
In determining the appropriate amount of revenue to be recognized as it fulfills its obligation under each of its agreements, the Company performs the five steps under Topic 606 described above. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement of personnel costs, discount rates and probabilities of technical and regulatory success.
Licensing of Intellectual Property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period, and, if necessary, adjusts the measure of performance and related revenue recognition.
Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal will not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license, collaboration and other revenues and earnings in their period of adjustment.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue from its license agreements.
Manufacturing and Supply: The obligations under the Company’s agreements may include clinical and/or commercial manufacturing products to be provided by the Company to the counterparty. The services are generally determined to be distinct from the other promises or performance obligations identified in the arrangement. The
9
Company recognizes the transaction price allocated to these services as revenue at a point in time when transfer of control of the related products to the customer occurs.
Accruals for Clinical Trial Expenses
Clinical trial costs primarily consist of expenses incurred under agreements with contract research organizations (CROs), investigative sites, laboratory testing expenses, data management and consultants that conduct the Company's clinical trials. Clinical trial expenses have historically been a significant component of research and development expenses, and the Company previously outsourced a significant portion of its clinical trial activities to third parties. The accrual for site and patient costs includes inputs such as estimates of patient enrollment, patient cycles incurred, estimated project duration and other pass-through costs. As a result of the Company ceasing its clinical activities, the costs of closing down clinical sites are also included in the accruals. These inputs are required to be estimated due to a lag in receiving the actual clinical information from third parties. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the balance sheets as a prepaid asset or accrued expenses. These third-party agreements are generally cancellable, and related costs are recorded as research and development expenses as incurred. Except for payments made in advance of services, clinical trial costs are expensed as incurred. Non-refundable advance clinical payments for goods or services that will be used or rendered for future research and development activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the related services are performed. When evaluating the adequacy of the accrued expenses, management assessments include: (i) an evaluation by the project manager of the work that has been completed during the period; (ii) measurement of progress prepared internally and/or provided by the third-party service provider; (iii) analyses of data that justify the progress; and (iv) the Company’s judgment. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the estimates made. The Company’s historical clinical accrual estimates have not been materially different from the actual costs.
Stock-Based Compensation
Stock-based payments are accounted for in accordance with the provisions of ASC 718, Compensation—Stock Compensation. The fair value of stock-based payments is estimated, on the date of grant, using the Black-Scholes-Merton model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the option. The Company accounts for forfeitures as they occur.
The Company has elected to use the Black-Scholes-Merton option pricing model to value any options granted. The Company will reconsider use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that prevent their value from being reasonably estimated using this model.
A discussion of management’s methodology for developing some of the assumptions used in the valuation model follows:
Expected Dividend Yield—The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.
Expected Volatility—Volatility is a measure of the amount by which a financial variable such as share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company bases the expected volatility on the historical volatility of the Company’s publicly traded common stock.
Risk-Free Interest Rate—This is the U.S. Treasury rate for the week of each option grant during the year, having a term that most closely resembles the expected life of the option.
Expected Term—This is a period of time that the options granted are expected to remain unexercised. Options granted have a maximum term of
10
Net Loss Per Common Share
Basic net loss per common share is determined by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock options and restricted stock units (RSUs).
The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average common shares outstanding, as they would be anti-dilutive:
Six Months Ended June 30, | ||||
2024 |
| 2023 |
| |
Stock options and RSUs | |
| |
|
Comprehensive Loss
Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the three and six months ended June 30, 2024 and 2023, the Company’s net loss equaled comprehensive net loss and, accordingly, no additional disclosure is presented.
Recently Issued Accounting Standards
Accounting Standards Not Yet Adopted
There have been no new accounting pronouncements that have significance, or potential significance, to the Company’s unaudited financial statements as of and for the six months ended June 30, 2024.
4. Prepaid Expenses and Other Current Assets
The following is a summary of the Company’s prepaid expenses and other current assets:
June 30, | December 31, | ||||||
| 2024 |
| 2023 |
| |||
Prepaid research and development expenses | $ | | $ | | |||
Other prepaid expenses | | | |||||
Other receivables |
| |
| | |||
Prepaid expenses and other current assets | $ | | $ | |
5. Accrued Expenses
The following is a summary of the Company’s accrued expenses:
| June 30, | December 31, | ||||
2024 | 2023 | |||||
Accrued research and development expenses | $ | | $ | | ||
Accrued bonuses | — | | ||||
Accrued consulting and other professional fees |
| |
| | ||
Accrued employee benefits |
| |
| | ||
Other accrued expenses |
| |
| — | ||
Accrued expenses | $ | | $ | |
11
6. Operating Leases
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the circumstances present. The Company determines a lease exists if the contract conveys the right to control an identified asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to obtain substantially all of the economic benefits from the use of an identified asset as well as direct the right to use of that asset. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less on the lease commencement date. If a contract is considered to be a lease, the Company recognizes a lease liability based on the present value of the future lease payments over the expected lease term, with an offsetting entry to recognize a right-of-use asset. The Company has also elected to use the practical expedient and account for each lease component and related non-lease component as one
The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a term similar to the term of the lease for which the rate is estimated. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.
The Company leases office and research space in Rockville, Maryland under an operating lease that is subject to annual rent increases (the Lease). The Company paid a security deposit of $
The components of lease expense and related cash flows were as follows:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Operating lease cost | $ | | $ | | $ | | $ | | ||||
Variable lease cost | | | | | ||||||||
Total operating lease cost | $ | | $ | | $ | | $ | | ||||
| ||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||
Operating cash outflows for operating leases | $ | | $ | | $ | | $ | |
Maturities of lease liability due under these lease agreements as of June 30, 2024 were as follows:
Operating Lease | |||
| Obligation | ||
July 1, 2024 - December 31, 2024 | $ | | |
2025 | | ||
Thereafter | |||
Total | | ||
Present value adjustment | ( | ||
$ | |
12
Supplemental information related to leases were as follows:
| June 30, | December 31, | ||||
Operating Leases | 2024 | 2023 | ||||
Weighted-average remaining lease term (in years) |
|
| ||||
Weighted-average incremental borrowing rate |
Six Months Ended June 30, | |||||
2024 |
| 2023 | |||
Right-of-use assets obtained in exchange for operating lease obligations | $ | - | $ | |
7. Stockholders’ Equity
Common Stock
During the three months ended June 30, 2024, the Company’s board of directors adopted, and its stockholders approved, an increase in the total authorized shares of common stock from
At-The-Market Sales Facility
In March 2022, the Company filed a shelf registration statement with the SEC, which was declared effective on April 22, 2022. On April 28, 2022, the Company entered into an at-the-market sales agreement (the 2022 Sales Agreement) with Cowen and Company, LLC. Under the 2022 Sales Agreement, the Company may sell up to $
8. Stock-based Compensation
2013 Equity Incentive Plan
The Company’s board of directors adopted, and its stockholders approved, its 2013 Equity Incentive Plan effective in January 2014, and the 2013 Equity Incentive Plan was amended and restated by approval of the board of directors in April 2022 and by approval of the stockholders in May 2022 (as so amended and restated, the 2013 Plan). The 2013 Plan provides for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code (the Code) to the Company’s employees and its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards (RSUs), stock appreciation rights, performance stock awards and other forms of stock compensation to its employees, including officers, consultants and directors. The 2013 Plan also provides for the grant of performance cash awards to the Company’s employees, consultants and directors. Unless otherwise stated in a stock option agreement,
Authorized Shares
The maximum number of shares of common stock that may be issued under the 2013 Plan was originally
13
may be issued under the 2013 Plan will cumulatively be increased by
Shares issued under the 2013 Plan may be authorized but unissued or reacquired shares of common stock. Shares subject to stock awards granted under the 2013 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under the 2013 Plan. Additionally, shares issued pursuant to stock awards under the 2013 Plan that the Company repurchases or that are forfeited, as well as shares reacquired by the Company as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under the 2013 Plan.
A summary of the Company’s stock option activity under the 2013 Plan for the six months ended June 30, 2024 is as follows:
WEIGHTED- | ||||||||||
| WEIGHTED- | AVERAGE |
| AGGEGATE | ||||||
| AVERAGE | REMAINING |
| INTRINSIC | ||||||
| OUTSTANDING | EXERCISE | CONTRACTUAL |
| VALUE | |||||
| OPTIONS |
| PRICE |
| TERM (YEARS) |
|
| (IN THOUSANDS) | ||
Outstanding as of December 31, 2023 | | $ | |
|
| |||||
Options granted | | | ||||||||
Options exercised | ( | | ||||||||
Options forfeited | ( | | ||||||||
Outstanding as of June 30, 2024 | | | $ | | ||||||
Vested or expected to vest as of June 30, 2024 | | |
| — | ||||||
Exercisable as of June 30, 2024 | | |
| — |
As of June 30, 2024, there was $
The Company has granted stock options to purchase an aggregate of
An RSU is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s common stock on the date of grant. In January 2021, the Company awarded RSUs under the 2013 Plan to all of its employees. The RSUs granted vest over
14
The following is a summary of RSU activity under the 2013 Plan for the six months ended June 30, 2024:
| Weighted-Average |
| ||||
Number of Shares | Grant Date |
| ||||
Underlying RSUs |
| Fair Value |
| |||
Unvested at December 31, 2023 | | $ | | |||
Vested | ( |
| | |||
Forfeited | ( | | ||||
Unvested at June 30, 2024 | |
| |
Issuance of Shares to Directors in Lieu of Cash Retainers for Service
In March 2023, the Company’s board of directors amended the Company’s Non-Employee Director Compensation Policy to include an election to receive unrestricted shares of common stock in lieu of quarterly board and committee retainer cash payments. The number of shares to be issued to an electing director is determined on the last day of each fiscal quarter by dividing the dollar amount of the compensation to be paid for such quarter that is subject to the election by the closing price of a share of common stock on the last trading day of the fiscal quarter, rounded up to the nearest whole share. Non-employee directors who made such an election received
In June 2024, the Non-Employee Director Compensation Policy was amended to allow a director to revoke his or her annual election to receive unrestricted shares of common stock in lieu of quarterly board and committee retainer cash payments. The decision to amend the policy followed a significant decline in the market value of the Company’s common stock in May 2024. Without the ability of the directors to revoke the prior elections, the Company would have been obligated to issue a significantly greater number of shares than in prior quarters in lieu of the fixed cash retainer payments. Each of the directors who previously elected to receive unrestricted shares of common stock in lieu of quarterly board and committee retainer cash payments for 2024 revoked their elections in June 2024, and as a result there were
Inducement Plan
The Company’s board of directors previously adopted the GlycoMimetics, Inc. Inducement Plan (as amended to date, the Inducement Plan). The Inducement Plan provides for the grant of nonstatutory stock options, restricted stock awards, RSU awards, stock appreciation rights and other forms of stock awards to individuals not previously an employee or director of the Company as an inducement for such individuals to join the Company. Unless otherwise stated in an applicable stock option agreement,
15
A summary of the Company’s stock option activity under the Inducement Plan for the six months ended June 30, 2024 is as follows:
WEIGHTED- |
| |||||||||
| WEIGHTED- | AVERAGE |
|
| AGGEGATE | |||||
| AVERAGE | REMAINING |
| INTRINSIC | ||||||
| OUTSTANDING | EXERCISE | CONTRACTUAL |
| VALUE | |||||
| OPTIONS |
| PRICE |
| TERM (YEARS) |
|
| (IN THOUSANDS) | ||
Outstanding as of December 31, 2023 | | $ | |
|
| |||||
Options granted | | | ||||||||
Options forfeited | ( | | ||||||||
Outstanding as of June 30, 2024 | | | $ | — | ||||||
Vested or expected to vest as of June 30, 2024 | | |
| — | ||||||
Exercisable as of June 30, 2024 | | |
| — |
As of June 30, 2024, there was $
The Company has granted stock options to purchase an aggregate of
The weighted-average fair value of the options granted under all equity incentive plans during the six months ended June 30, 2024 and 2023 was $
| 2024 | 2023 | ||
Expected term |
| |||
Expected volatility |
| |||
Risk-free interest rate |
| |||
Expected dividend yield |
|
Stock-based compensation expense was classified on the statements of operations as follows for the three and six months ended June 30, 2024 and 2023:
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2024 | 2023 |
| 2024 | 2023 |
| |||||||
Research and development expense | $ | | $ | | $ | | $ | | |||||
General and administrative expense |
| |
| |
| |
| | |||||
Total stock-based compensation expense | $ | | $ | | $ | | $ | |
16
9. Income Taxes
The Company did not record any tax provision or benefit for the six months ended June 30, 2024 or 2023. The Company has provided a valuation allowance for the full amount of its net deferred tax assets since realization of any future benefit from deductible temporary differences, net operating loss carryforwards and research and development credits is not more-likely-than-not to be realized at June 30, 2024 and December 31, 2023.
10. License and Collaboration Agreements
Apollomics
In 2020, the Company entered into a collaboration and license agreement (the Agreement) with Apollomics (Hong Kong), Limited (Apollomics) for the development, manufacture and commercialization of products derived from two of the Company’s compounds, GMI-1271 and GMI-1687 (the Products) for therapeutic and prophylactic uses (the Field) in China, Taiwan, Hong Kong and Macau (the Territory). Under the terms of the Agreement, the Company granted Apollomics:
● | an exclusive license, with the right to sublicense, to develop, manufacture and have manufactured, distribute, market, promote, sell, have sold, offer for sale, import, label, package and otherwise the Products in the Field in the Territory; and |
● | a non-exclusive license to conduct preclinical research with respect to Products in the Field outside of the Territory for the purposes of developing such Products for use in the Territory. |
In 2020, the Company and Apollomics also entered into a clinical supply agreement pursuant to which the Company will manufacture and supply the Products at agreed upon prices. Apollomics has the option to begin manufacture of the Products after appropriate material transfer requirements are met. The Company did not recognize any revenue under the clinical supplies agreement during the six months ended June 30, 2024 and 2023.
The Company evaluated the Agreement under the provisions of ASC 606 and identified two performance obligations under this revenue arrangement: the (i) delivery of functional licenses and (ii) manufacture and supply of the Products. The initial transaction price consists of a $
The Company will recognize revenue related to the sales-based commercial and royalty milestones and royalties at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied), as they were determined to relate predominantly to the licenses granted to Apollomics and, therefore, have been excluded from the transaction price. Lastly, the Company has determined that the consideration for the manufacturing and supply is all variable and is fully constrained. Variable consideration allocated to manufacturing and supply will be recognized at a point in time when the Product is delivered and when the title to the Product is transferred to the customer pursuant to the agreement. The Company reassesses the transaction price in each reporting period and upon the occurrence of a change in circumstances or final resolution of any particular event.
17
11. Subsequent Events
In July 2024, the Company’s Board of Directors approved a streamlined operating plan that includes the exploration of strategic alternatives focused on maximizing shareholder value. The Company concluded, following feedback from the U.S. Food and Drug Administration, that the regulatory path forward for its lead product candidate uproleselan for the treatment of relapsed and refractory acute myeloid leukemia would require an additional clinical trial. The decision was not related to any safety or medical issues or negative regulatory feedback related to the Company’s programs.
In connection with the streamlined operating plan approved by the Board, the Company has undertaken a corporate restructuring that includes a reduction in the Company’s workforce by
18
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Certain statements contained in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases “would be,” “will allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” or similar expressions, or the negative of such words or phrases, are intended to identify “forward-looking statements.” We have based these forward-looking statements on our current expectations and projections about future events. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include those below and elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K, particularly in Part I – Item 1A, “Risk Factors,” and our other filings with the Securities and Exchange Commission. Statements made herein are as of the date of the filing of this Form 10-Q with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim, any obligation to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes that appear in Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and related notes for the year ended December 31, 2023, which are included in our Annual Report on Form 10-K filed with the SEC on March 27, 2024.
Overview
We are a late clinical-stage biotechnology company focused on improving the lives of people living with cancer and inflammatory diseases by leveraging the inhibition of carbohydrate interactions that occur on the surface of cells. We have been developing a pipeline of proprietary glycomimetics, which are small molecules that mimic the structure of carbohydrates involved in important biological processes, to inhibit disease-related functions of carbohydrates such as the roles they play in cancers and inflammation. We believe this represents an innovative approach to drug discovery to treat a wide range of diseases. We have focused our efforts on drug candidates for diseases that we believe will qualify for orphan drug designation.
Our lead glycomimetic drug candidate, uproleselan, is a specific E-selectin antagonist that we are developing to be used in combination with chemotherapy to treat patients with acute myeloid leukemia, or AML, a life-threatening hematologic cancer, and potentially other hematologic cancers. In 2021, we completed enrollment of 388 patients across nine countries in a randomized, double-blind, placebo-controlled Phase 3 pivotal clinical trial to evaluate uproleselan in individuals with relapsed/refractory (R/R) AML, the design of which was based on guidance received from the FDA.
On May 6, 2024, we reported topline results from the trial, in which uproleselan combined with chemotherapy did not achieve a statistically significant improvement in overall survival in the intent to treat (ITT) population versus chemotherapy alone. Patients treated with uproleselan had a median overall survival of 13 months, compared to 12.3 months in the placebo arm. Adverse events were consistent with known side effect profiles of chemotherapy used in the trial. On June 4, 2024, we announced comprehensive results of the Phase 3 trial, which are summarized below.
The trial evaluated uproleselan in combination with MEC (mitoxantrone, etoposide and cytarabine) or FAI (fludarabine, cytarabine and idarubicin) in patients with R/R AML. Patients received either uproleselan or placebo for 8 days over 1 cycle of induction and, if applicable, up to 3 cycles of consolidation. The primary endpoint was overall survival (OS), which was not censored for transplant. Secondary endpoints included incidence of severe oral mucositis, complete remission (CR) rate and CR with partial hematologic recovery (CRh). Patients were randomized 1:1 between treatment and placebo arms. There were 59 sites that enrolled at least one patient. Median follow up was over three years at the time of primary analysis.
19
Overall Survival
● | Primary Endpoint: median overall survival (mOS) in the ITT population (n=388) was 13.0 months for the uproleselan arm, compared to 12.3 months for the placebo arm (hazard ratio [HR] 0.89; 95% confidence interval [CI] 0.69-1.15); this difference was not statistically significant. |
● | Disease Status |
◾ | Primary Refractory: mOS for primary refractory patients in the uproleselan arm (n=62) was 31.2 months, compared to 10.1 months (HR 0.58; 95% CI 0.37-0.91) for the placebo arm (n=66). This benefit was irrespective of backbone chemotherapy. |
● | Median duration of response (DoR) for complete remission (CR) was not reached for primary refractory patients in the uproleselan arm compared to a median DoR of 12.7 months for the placebo arm. |
◾ | Early Relapse: mOS for early relapse patients in the uproleselan arm (n=28) was 3.7 months, compared to 6.4 months (HR 1.50; 95% CI 0.69-3.27) for the placebo arm (n=22). |
◾ | Late Relapse: mOS for late relapse patients in the uproleselan arm (n=104) was 15.4 months, compared to 18.2 months (HR 1.10; 95% CI 0.77-1.57) for the placebo arm (n=106). |
◾ | Backbone Chemotherapy: |
◾ | FAI: mOS for patients treated with uproleselan plus FAI (n=98) was 30.2 months compared to 12.8 months (HR 0.73; 95% CI 0.50-1.06) for patients treated with FAI alone (n=96) in the ITT population. |
◾ | MEC: mOS for patients treated with uproleselan plus MEC (n=96) was 8.7 months compared to 12.3 months (HR 1.06; 95% CI 0.75-1.51) for patients treated with MEC alone (n=98) in the ITT population. |
◾ | Transplantation Status: |
◾ | For patients who received hematopoietic stem cell transplantation (HSCT) after study treatment, mOS was not reached for patients in the uproleselan arm (n=101). In contrast, for HSCT patients in the placebo arm, mOS for patients receiving FAI (n=53) was 26.3 months and for patients receiving MEC (n=46) was 24.4 months. |
Secondary Endpoints
◾ | 7.2% of patients in each arm (n=388) experienced induction emergent severe oral mucositis. |
◾ | 36.1% of patients in the uproleselan arm (n=194) experienced CR at the end of induction (EOI) as determined by an independent endpoint review committee (IERC), compared to 33.5% of patients in the placebo arm (n=194). |
◾ | 46.4% of patients in the uproleselan arm experienced CR/CRh at EOI as determined by IERC, compared to 41.2% of patients in the placebo arm. |
◾ | Post-treatment HSCT rate was 52.1% in the uproleselan arm and 51.0% in the placebo arm. |
◾ | Subsequent AML therapy in non-responders was 40.0% in the uproleselan arm (n=80) and 46.2% in the placebo arm (n=78). |
Safety
◾ | Adverse events were consistent with the known safety profile for backbone chemotherapy regimens. |
◾ | 35.9% of patients in the uproleselan arm experienced serious treatment-emergent adverse events (TEAEs) compared to 34.2% in the placebo arm. |
◾ | 85.9% of patients in the uproleselan arm experienced grade 3 or higher TEAEs compared to 87.6% in the placebo arm. |
Following the announcement of the data from the Phase 3 trial, we requested and held a meeting with the FDA to discuss whether any of the results summarized above could serve as a basis for a submission for regulatory approval. Based on the feedback received, we have concluded that the regulatory path forward for uproleselan in this patient population would require an additional clinical trial, the conduct of which would require capital resources beyond those that are currently available to us. We are evaluating strategic alternatives to provide for the continued advancement of uproleselan.
20
We have also entered into a Cooperative Research and Development Agreement, or CRADA, with the National Cancer Institute, or NCI, part of the National Institutes of Health, to conduct a Phase 2/3 randomized, controlled clinical trial testing the addition of uproleselan to a standard chemotherapy regimen. Enrollment of 267 patients in the Phase 2 portion was completed in December 2021. There will be a planned interim analysis that will evaluate event-free survival and whether the pre-specified threshold for continuing to Phase 3 has been met. The trial could provide support for regulatory filings, if the results of the planned interim analysis are sufficiently positive. Notwithstanding the results of our Phase 3 pivotal trial of uproleselan, the Phase 2/3 trial is ongoing with limited funding from us.
In addition to uproleselan, we designed an innovative antagonist of E-selectin, GMI-1687, that could be a subcutaneously administered treatment. Initially developed as a potential life-cycle extension to uproleselan, we believe that GMI-1687 could be developed to broaden the clinical usefulness of an E-selectin antagonist to conditions where outpatient treatment is preferred or required. In 2022, we filed an IND for GMI-1687 as a potential treatment for vaso-occlusive event (VOE), a common complication of sickle cell disease, and in December 2023, we completed enrollment of 40 subjects in a Phase 1a trial of GMI-1687 in healthy adult volunteers. As described below, we have entered into a collaboration with Apollomics for the development of GMI-1687, as well as uproleselan, in Greater China. We are not otherwise actively developing GMI-1687.
We have financed our operations primarily through private placements of our securities, up-front and milestone payments under our license and collaboration agreements and the net proceeds from public offerings of common stock, including sales of common stock under at-the-market sales facilities with Cowen and Company LLC, or Cowen. We have no approved drugs currently available for sale, and substantially all of our revenue to date has been revenue from up-front and milestone payments under license and collaboration agreements.
Since inception, we have incurred significant operating losses. We had an accumulated deficit of $478.3 million as of June 30, 2024 and continue to incur operating losses.
In July 2024, following the announcement of the data from our Phase 3 pivotal trial and our discussions with the FDA, we also announced that we would initiate a review of strategic alternatives focused on maximizing stockholder value, which could include, but are not limited to, a merger, sale, divestiture of assets, licensing, or other strategic transaction. We expect to devote substantial time and resources to exploring strategic alternatives that our board of directors believes will maximize stockholder value. Despite devoting significant efforts to identify and evaluate potential strategic alternatives, there can be no assurance that this strategic review process will result in us pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. We have not set a timetable for completion of this strategic review process, and our board of directors has not approved a definitive course of action. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stockholder value, or that we will make any cash distributions to our stockholders. In connection with the evaluation of strategic alternatives and in order maximize capital preservation, we have implemented a plan to reduce our workforce by approximately 80%. This workforce reduction plan was approved in July 2024 and is substantially complete as of the date of this report.
Based on our revised operating plan, we expect that our current cash and cash equivalents will fund our operations into the second quarter of 2025; however, we have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. To fund any further operations, we would need to further reduce our expenses or raise additional capital. We may obtain additional financing in the future through the issuance of our common stock, through other equity or debt financings, through collaborations or partnerships with other companies, or through the sale of rights to our drug candidates. We may not be able to raise additional capital on terms acceptable to us, or at all. If we are unable to raise additional capital and are unable to enter into a strategic transaction, we will need to further reduce the scope of or eliminate some or all of our operations or liquidate our company.
Our Agreements with Apollomics
In January 2020, we entered into an exclusive collaboration and license agreement with Apollomics (Hong Kong) Limited, or Apollomics, for the development and commercialization of uproleselan and GMI-1687 in Mainland China, Hong Kong, Macau and Taiwan, also known as Greater China. Under the terms of the agreement, Apollomics will be responsible for clinical development and commercialization in Greater China. We will also collaborate with Apollomics
21
to advance the preclinical and clinical development of GMI-1687. We received an upfront cash payment of $9.0 million and in September 2020 received a $1.0 million development milestone payment. There were no milestone payments from Apollomics during the six months ended June 30, 2024 or 2023. Subject to the terms of the agreement, we will be eligible to receive potential further milestone payments totaling approximately $179.0 million, as well as tiered royalties ranging from the high single digits to 15%, as a percentage of net sales. Apollomics will be responsible for all costs related to development, regulatory approvals, and commercialization activities for uproleselan and GMI-1687 in Greater China, and we and Apollomics expect to enter into clinical and commercial supply agreements with respect to our provision of uproleselan and GMI-1687 to Apollomics. We retain all rights for both compounds in the rest of the world.
In September 2020, the China National Medical Products Administration, or NMPA, Center for Drug Evaluation, or CDE, granted IND approval for uproleselan (also known as APL-106), enabling the initiation of a Phase 1 pharmacokinetics and tolerability study and a Phase 3 bridging study of APL-106 in combination with chemotherapy in relapsed/refractory AML. In January 2021, APL-106 was granted Breakthrough Therapy Designation from the China NMPA CDE for the treatment of relapsed/refractory AML. In January 2024, Apollomics announced the completion of enrollment in the Phase 3 bridging study. A total of 140 adult patients across 20 sites in Greater China with primary refractory AML or relapsed AML (first or second untreated relapse) and eligible to receive induction chemotherapy were randomized to receive either uproleselan combined with chemotherapy or placebo plus chemotherapy. The primary endpoint for the Phase 3 bridging study is overall survival. Secondary outcome measures include the rate and duration of remission and whether uproleselan can reduce the rate of oral mucositis, a chemotherapy-related side effect.
In June 2020, we entered into a clinical supply agreement with Apollomics under which we will manufacture and supply uproleselan product to Apollomics at agreed upon prices. Apollomics has the option to begin manufacture after appropriate material transfer requirements are met. During the year ended December 31, 2021, we recognized $1.1 million in revenue from the sale of clinical supplies to Apollomics under the clinical supply agreement. There were no sales of clinical supplies to Apollomics during the six months ended June 30, 2024 or 2023.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the balance sheets and the reported amounts of revenue and expenses during the reporting periods. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances at the time such estimates are made. Actual results may materially differ from our estimates and judgments under different assumptions or conditions. We periodically review our estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in our financial statements prospectively from the date of the change in estimate.
We define our critical accounting policies as those accounting principles generally accepted in the United States that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. For a description of our critical accounting policies and estimates, please see the disclosures in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have not been any material changes to our critical accounting policies and estimates since December 31, 2023.
Components of Operating Results
Revenue
To date, we have not generated any revenue from the sale of our drug candidates and do not expect to generate any revenue from the sale of drugs in the near future. Substantially all of our historical revenue consisted of upfront and milestone payments under license and collaboration agreements.
22
Research and Development
Research and development expenses consist of expenses incurred in performing research and development activities, including compensation and benefits for full-time research and development employees, facilities expenses, overhead expenses, cost of laboratory supplies, clinical trial and related clinical manufacturing expenses, fees paid to CROs and other consultants and other outside expenses. Other preclinical research and platform programs include activities related to exploratory efforts, target validation, lead optimization for our earlier programs and our proprietary glycomimetics platform. Our research and development expenses have related primarily to the development of uproleselan and our other drug candidates.
We do not currently utilize a formal time allocation system to capture expenses on a project-by-project basis because we are organized and record expense by functional department and our employees may allocate time to more than one development project. Accordingly, we only allocate a portion of our research and development expenses by functional area and by drug candidate.
Research and development costs are expensed as incurred. Non-refundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.
Research and development activities are central to our business model. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later stage clinical trials. It is difficult to determine with certainty the duration and completion costs of preclinical studies and clinical trials of our drug candidates, or if, when or to what extent we will generate revenues from the commercialization and sale of any of our drug candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our drug candidates.
Should we resume development of our product candidates, the duration, costs and timing of clinical trials and development of our drug candidates would depend on a variety of factors that include:
● | per patient trial costs; |
● | the number of patients that participate in the trials; |
● | the number of sites included in the trials; |
● | the countries in which the trial is conducted; |
● | the length of time required to enroll eligible patients; |
● | the number of doses that patients receive; |
● | the drop-out or discontinuation rates of patients; |
● | potential additional safety monitoring or other studies requested by regulatory agencies; |
● | the duration of patient follow-up; and |
● | the safety and efficacy profile of the drug candidate. |
In addition, the probability of success for each drug candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability. We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success of each drug candidate, as well as an assessment of each drug candidate’s commercial potential.
General and Administrative
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in executive, finance, accounting, business development and human resources functions.
23
Other significant costs include facility costs not otherwise included in research and development expenses, legal fees relating to patent and corporate matters and fees for accounting and consulting services.
Interest Income
Interest income consists of interest income earned on our cash and cash equivalents.
Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023
The following tables set forth our results of operations for the three and six months ended June 30, 2024 and 2023:
Three Months Ended March 31, | Increase/(Decrease) | |||||||||||
(dollars in thousands) |
| 2024 |
| 2023 |
|
| ||||||
Costs and expenses: |
| |||||||||||
Research and development expense | $ | 6,286 | $ | 4,073 | $ | 2,213 | 54 | % | ||||
General and administrative expense |
| 4,072 |
| 4,857 |
| (785) | (16) | % | ||||
Total costs and expenses |
| 10,358 |
| 8,930 |
| 1,428 | 16 | % | ||||
Loss from operations |
| (10,358) |
| (8,930) |
| (1,428) | (16) | % | ||||
Interest income |
| 262 |
| 671 |
| (409) | (61) | % | ||||
Net loss and comprehensive loss | $ | (10,096) | $ | (8,259) | $ | (1,837) | (22) | % | ||||
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||
(dollars in thousands) |
| 2024 |
| 2023 |
|
| ||||||
Costs and expenses: |
| |||||||||||
Research and development expense |
| 12,311 |
| 9,491 |
| 2,820 | 30 | % | ||||
General and administrative expense |
| 9,162 |
| 10,380 |
| (1,218) | (12) | % | ||||
Total costs and expenses |
| 21,473 |
| 19,871 |
| 1,602 | 8 | % | ||||
Loss from operations |
| (21,473) |
| (19,871) |
| (1,602) | (8) | % | ||||
Interest income |
| 641 |
| 1,253 |
| (612) | (49) | % | ||||
Net loss and comprehensive loss | $ | (20,832) | $ | (18,618) | $ | (2,214) | (12) | % |
Research and Development Expense
The following tables summarize our research and development expense by functional area for the three and six months ended June 30, 2024 and 2023:
Three Months Ended June 30, | Increase/(Decrease) |
| |||||||||||
(dollars in thousands) |
| 2024 |
| 2023 |
| ||||||||
Clinical development | $ | 1,163 | $ | 924 | $ | 239 | 26 | % | |||||
Manufacturing and formulation |
| 2,702 |
| 262 |
| 2,440 | 931 | % | |||||
Contract research services, consulting and other costs |
| 562 |
| 440 |
| 122 | 28 | % | |||||
Laboratory costs |
| 309 |
| 374 |
| (65) | (17) | % | |||||
Personnel-related |
| 1,215 |
| 1,844 |
| (629) | (34) | % | |||||
Stock-based compensation | 335 | 229 | 106 | 46 | % | ||||||||
Research and development expense | $ | 6,286 | $ | 4,073 | $ | 2,213 | 54 | % | |||||
Six Months Ended June 30, | Increase/(Decrease) |
| |||||||||||
(dollars in thousands) |
| 2024 |
| 2023 |
| ||||||||
Clinical development | $ | 2,368 | $ | 2,300 | $ | 68 | 3 | % | |||||
Manufacturing and formulation |
| 4,102 |
| 715 |
| 3,387 | 474 | % | |||||
Contract research services, consulting and other costs |
| 1,214 |
| 1,081 |
| 133 | 12 | % | |||||
Laboratory costs |
| 599 |
| 801 |
| (202) | (25) | % | |||||
Personnel-related |
| 3,344 |
| 4,127 |
| (783) | (19) | % | |||||
Stock-based compensation | 684 | 467 | 217 | 46 | % | ||||||||
Research and development expense | $ | 12,311 | $ | 9,491 | $ | 2,820 | 30 | % |
24
The following tables summarize our research and development expense by drug candidate for the three and six months ended June 30, 2024 and 2023:
Three Months Ended June 30, | Increase/(Decrease) |
| |||||||||||
(dollars in thousands) |
| 2024 |
| 2023 | |||||||||
Uproleselan | $ | 4,064 | $ | 1,478 |
| $ | 2,586 | 175 | % | ||||
GMI-1687 | 70 | 19 |
| 51 | 268 | % | |||||||
Other research and development |
| 602 |
| 503 |
| 99 | 20 | % | |||||
Personnel-related and stock-based compensation |
| 1,550 |
| 2,073 |
| (523) | (25) | % | |||||
Research and development expense | $ | 6,286 | $ | 4,073 | $ | 2,213 | 54 | % | |||||
| |||||||||||||
Six Months Ended June 30, | Increase/(Decrease) |
| |||||||||||
(dollars in thousands) |
| 2024 |
| 2023 | |||||||||
Uproleselan | $ | 6,809 | $ | 3,750 | $ | 3,059 | 82 | % |