0000950170-24-093858.txt : 20240808 0000950170-24-093858.hdr.sgml : 20240808 20240808160136 ACCESSION NUMBER: 0000950170-24-093858 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 57 CONFORMED PERIOD OF REPORT: 20240630 FILED AS OF DATE: 20240808 DATE AS OF CHANGE: 20240808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Vor Biopharma Inc. CENTRAL INDEX KEY: 0001817229 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] ORGANIZATION NAME: 03 Life Sciences IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39979 FILM NUMBER: 241188040 BUSINESS ADDRESS: STREET 1: 100 CAMBRIDGEPARK DRIVE STREET 2: SUITE 101 CITY: CAMBRIDGE STATE: MA ZIP: 02140 BUSINESS PHONE: 617-655-6580 MAIL ADDRESS: STREET 1: 100 CAMBRIDGEPARK DRIVE STREET 2: SUITE 101 CITY: CAMBRIDGE STATE: MA ZIP: 02140 10-Q 1 vor-20240630.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

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: 001-39979

 

VOR BIOPHARMA INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

81-1591163

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

100 Cambridgepark Drive, Suite 101

Cambridge, Massachusetts

02140

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (617) 655-6580

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

 

VOR

 

Nasdaq Global Select Market

 

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. Yes ☒ No ☐

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

Emerging growth 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 Exchange Act). Yes ☐ No

Number of shares of the registrant’s Common Stock outstanding as of August 2, 2024 was 68,398,826.

 


 

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

1

 

 

 

Item 1.

Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023

1

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2024 and 2023

2

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023

3

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023

4

Notes to Condensed Consolidated Financial Statements (Unaudited)

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

12

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

19

Item 4.

Controls and Procedures

19

 

 

 

PART II.

OTHER INFORMATION

20

 

 

 

Item 1.

Legal Proceedings

20

Item 1A.

Risk Factors

20

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

20

Item 6.

Exhibits

21

 

Signatures

22

 

 

i


 

Note Regarding Company References

Throughout this Quarterly Report on Form 10-Q, the “Company,” “Vor,” “Vor Bio,” “Vor Biopharma Inc.,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Vor Biopharma Inc. and its consolidated subsidiary, and “our board of directors” refers to the board of directors of Vor Biopharma Inc.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “might,” “intend,” “target,” “ongoing,” “project,” “estimate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions intended to identify statements about the future. These statements speak only as of the date of this Quarterly Report on Form 10-Q and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements include, without limitation, statements about:

the timing, progress and results of our preclinical studies and clinical trials of our product candidates, including statements regarding the timing and pace of initiation, enrollment and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and plans with respect to our research and development programs;
the timing and success of our in-house or third-party clinical manufacturing capabilities and efforts;
the timing of any submission of filings for regulatory approval of, and our ability to obtain and maintain regulatory approvals for, our product candidates for any indication;
our ability to identify patients with the diseases treated by our product candidates, and to enroll patients in trials;
our expectations regarding the market acceptance and opportunity for and clinical utility of our product candidates, if approved for commercial use;
our expectations regarding the scope of any approved indication for any product candidate;
our ability to successfully commercialize our product candidates;
our estimates of our expenses, ongoing losses, future revenue, capital requirements, our need for or ability to obtain additional funding and our ability to continue as a going concern;
our ability to establish or maintain collaborations or strategic relationships;
our ability to identify, recruit and retain key personnel, including executive officers and members of management;
our reliance upon intellectual property licensed from third parties and our ability to obtain such licenses on commercially reasonable terms or at all;
our ability to protect and enforce our intellectual property position for our product candidates, and the scope of such protection;
our financial performance;
the period over which we estimate our existing cash, cash equivalents and marketable securities will be sufficient to fund our future operating expenses and capital expenditure requirements;
our competitive position and the development of and projections relating to our competitors or our industry;
the impact of laws and regulations; and
our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012.

ii


 

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. You should refer to the “Summary Risk Factors” and “Risk Factors” sections in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of material factors that could cause actual results or events to differ materially from the forward-looking statements that we make.

This Quarterly Report on Form 10-Q includes statistical and other industry and market data, which we obtained from our own internal estimates and research, as well as from industry and general publications and research, surveys, and studies conducted by third parties. Industry publications, studies, and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the market definitions are appropriate, neither such research nor these definitions have been verified by any independent source.

All brand names or trademarks appearing in this Quarterly Report on Form 10-Q, including Mylotarg, are the property of their respective owners.

 

 

iii


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

VOR BIOPHARMA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

June 30,

 

 

December 31,

 

(in thousands, except share and per share amounts)

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

76,076

 

 

$

31,360

 

Marketable securities

 

 

9,862

 

 

 

105,815

 

Prepaid expenses

 

 

4,046

 

 

 

3,153

 

Other current assets

 

 

272

 

 

 

475

 

Total current assets

 

 

90,256

 

 

 

140,803

 

Restricted cash equivalents

 

 

2,413

 

 

 

2,413

 

Property and equipment, net

 

 

8,291

 

 

 

10,050

 

Operating lease right-of-use assets

 

 

37,565

 

 

 

40,048

 

Other assets

 

 

3,063

 

 

 

4,812

 

Total assets

 

$

141,588

 

 

$

198,126

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,007

 

 

$

815

 

Accrued liabilities

 

 

7,656

 

 

 

10,877

 

Operating lease liabilities

 

 

4,113

 

 

 

3,830

 

Other current liabilities

 

 

25

 

 

 

50

 

Total current liabilities

 

 

13,801

 

 

 

15,572

 

Long-term liabilities:

 

 

 

 

 

 

Operating lease liabilities—non-current

 

 

29,707

 

 

 

31,830

 

Total liabilities

 

 

43,508

 

 

 

47,402

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023

 

 

 

 

 

 

Common stock, $0.0001 par value; 400,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 68,363,034, and 67,901,610 shares issued and 68,357,884 and 67,891,311 shares outstanding as of June 30, 2024 and December 31, 2023, respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

496,866

 

 

 

490,874

 

Accumulated other comprehensive loss

 

 

(70

)

 

 

(77

)

Accumulated deficit

 

 

(398,723

)

 

 

(340,080

)

Total stockholders’ equity

 

 

98,080

 

 

 

150,724

 

Total liabilities and stockholders’ equity

 

$

141,588

 

 

$

198,126

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

VOR BIOPHARMA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

 

 

 

Three Months Ended
June 30,

 

 

 

Six Months Ended
June 30,

 

(in thousands, except share and per share amounts)

 

2024

 

 

2023

 

 

 

2024

 

 

2023

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

21,823

 

 

$

23,897

 

 

 

$

46,145

 

 

$

45,812

 

General and administrative

 

 

7,212

 

 

 

8,277

 

 

 

 

15,216

 

 

 

16,784

 

Total operating expenses

 

$

29,035

 

 

$

32,174

 

 

 

$

61,361

 

 

$

62,596

 

Loss from operations

 

$

(29,035

)

 

$

(32,174

)

 

 

$

(61,361

)

 

$

(62,596

)

Other income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

1,196

 

 

 

2,195

 

 

 

 

2,718

 

 

 

4,184

 

Total other income

 

 

1,196

 

 

 

2,195

 

 

 

 

2,718

 

 

 

4,184

 

Net loss

 

$

(27,839

)

 

$

(29,979

)

 

 

$

(58,643

)

 

$

(58,412

)

Net loss per share attributable to common stockholders,
   basic and diluted

 

$

(0.41

)

 

$

(0.45

)

 

 

$

(0.86

)

 

$

(0.88

)

Weighted-average common shares outstanding,
   basic and diluted

 

 

68,299,170

 

 

 

67,033,150

 

 

 

 

68,165,068

 

 

 

66,651,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available for sale marketable securities

 

 

17

 

 

 

(262

)

 

 

 

7

 

 

 

334

 

Total other comprehensive income (loss)

 

 

17

 

 

 

(262

)

 

 

 

7

 

 

 

334

 

Comprehensive loss

 

$

(27,822

)

 

$

(30,241

)

 

 

$

(58,636

)

 

$

(58,078

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

Vor Biopharma Inc.

CONDENSED CONSOLIDATED Statements of stockholders’ EQUITY

(Unaudited)

 

 

 

Common
Stock

 

 

Additional
Paid-In

 

 

Accumulated other
comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

(in thousands, except share amounts)

 

Shares

 

 

Amount

 

 

Capital

 

 

loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2023

 

 

67,891,311

 

 

$

7

 

 

$

490,874

 

 

$

(77

)

 

$

(340,080

)

 

$

150,724

 

Issuance of common stock upon vesting of RSUs, net of shares withheld for taxes, and exercise of stock options

 

 

184,998

 

 

 

 

 

 

(169

)

 

 

 

 

 

 

 

 

(169

)

Issuance of common stock from at-the-market sales agreement

 

 

139,462

 

 

 

 

 

 

213

 

 

 

 

 

 

 

 

 

213

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

3,081

 

 

 

 

 

 

 

 

 

3,081

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(10

)

 

 

 

 

 

(10

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,804

)

 

 

(30,804

)

Balance at March 31, 2024

 

 

68,215,771

 

 

$

7

 

 

$

493,999

 

 

$

(87

)

 

$

(370,884

)

 

$

123,035

 

Issuance of shares upon vesting of RSUs, net of shares withheld for taxes, exercise of stock options, and issuance of common stock under ESPP

 

 

142,113

 

 

 

 

 

 

74

 

 

 

 

 

 

 

 

 

74

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,793

 

 

 

 

 

 

 

 

 

2,793

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

17

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,839

)

 

 

(27,839

)

Balance at June 30, 2024

 

 

68,357,884

 

 

$

7

 

 

$

496,866

 

 

$

(70

)

 

$

(398,723

)

 

$

98,080

 

 

 

 

 

Common
Stock

 

 

Additional
Paid-In

 

 

Accumulated other comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

(in thousands, except share amounts)

 

Shares

 

 

Amount

 

 

Capital

 

 

loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2022

 

 

65,996,138

 

 

$

7

 

 

$

473,587

 

 

$

(770

)

 

$

(222,217

)

 

$

250,607

 

Issuance of common stock upon vesting of RSUs, net of shares withheld for taxes, and exercise of stock options

 

 

205,485

 

 

 

 

 

 

(340

)

 

 

 

 

 

 

 

 

(340

)

Issuance of common stock from at-the-market sales agreement

 

 

733,274

 

 

 

 

 

 

3,717

 

 

 

 

 

 

 

 

 

3,717

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,068

 

 

 

 

 

 

 

 

 

4,068

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

596

 

 

 

 

 

 

596

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,433

)

 

 

(28,433

)

Balance at March 31, 2023

 

 

66,934,897

 

 

$

7

 

 

$

481,032

 

 

$

(174

)

 

$

(250,650

)

 

$

230,215

 

Issuance of shares upon vesting of RSUs, net of shares withheld for taxes, exercise of stock options, and issuance of common stock under ESPP

 

 

381,775

 

 

 

 

 

 

(317

)

 

 

 

 

 

 

 

 

(317

)

Issuance of common stock from open market sales agreement

 

 

116,888

 

 

 

 

 

 

555

 

 

 

 

 

 

 

 

 

555

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

4,238

 

 

 

 

 

 

 

 

 

4,238

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(262

)

 

 

 

 

 

(262

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29,979

)

 

 

(29,979

)

Balance at June 30, 2023

 

 

67,433,560

 

 

$

7

 

 

$

485,508

 

 

$

(436

)

 

$

(280,629

)

 

$

204,450

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


 

Vor Biopharma Inc.

condensed CONSOLIDATED StatementS of Cash Flows

(unaudited)

 

 

 

Six Months Ended June 30,

 

(in thousands)

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(58,643

)

 

$

(58,412

)

Adjustments to reconcile net loss to net cash used in operations:

 

 

 

 

 

 

Depreciation expense

 

 

1,812

 

 

 

1,707

 

Non-cash lease expense

 

 

2,483

 

 

 

2,317

 

Stock-based compensation

 

 

5,874

 

 

 

8,306

 

Interest amortization on marketable securities

 

 

(1,126

)

 

 

(2,447

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Operating lease liabilities

 

 

(1,840

)

 

 

(1,729

)

Prepaid expenses and other current assets

 

 

(690

)

 

 

2,214

 

Accounts payable and accrued liabilities

 

 

(1,931

)

 

 

19

 

Other assets

 

 

1,749

 

 

 

(343

)

Net cash used in operating activities

 

 

(52,312

)

 

 

(48,368

)

Cash flow from investing activities

 

 

 

 

 

 

Purchases of marketable securities

 

 

(9,914

)

 

 

(58,370

)

Proceeds from maturities of marketable securities

 

 

107,000

 

 

 

79,000

 

Purchases of property and equipment

 

 

(123

)

 

 

(493

)

Net cash provided by investing activities

 

 

96,963

 

 

 

20,137

 

Cash flow from financing activities

 

 

 

 

 

 

Payment of issuance costs related to underwritten public offering and concurrent private placement

 

 

 

 

 

(717

)

Proceeds from the issuance of common stock from at-the-market sales agreement, net of issuance costs

 

 

186

 

 

 

4,201

 

Repurchases of shares for tax withholdings upon vesting of restricted stock unit awards

 

 

(233

)

 

 

(945

)

Proceeds from stock option exercises and the issuance of shares under ESPP

 

 

112

 

 

 

198

 

Net cash provided by financing activities

 

 

65

 

 

 

2,737

 

Net increase (decrease) in cash, cash equivalents and restricted cash equivalents

 

 

44,716

 

 

 

(25,494

)

Cash, cash equivalents and restricted cash equivalents,
   beginning of period

 

$

33,773

 

 

$

60,119

 

Cash, cash equivalents and restricted cash equivalents, end of period

 

$

78,489

 

 

$

34,625

 

Supplemental disclosure of non-cash activities

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations

 

$

 

 

$

107

 

Financing costs associated with the sale of common stock included in accounts payable and accrued expenses

 

$

 

 

$

24

 

 

A reconciliation of the cash, cash equivalents and restricted cash equivalents reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the statements of cash flows is as follows:

 

 

 

For the Six Months Ended June 30,

 

(in thousands)

 

2024

 

 

2023

 

Cash and cash equivalents

 

$

76,076

 

 

$

32,212

 

Restricted cash equivalents

 

 

2,413

 

 

 

2,413

 

Total cash, cash equivalents and restricted cash equivalents as shown on the
   statements of cash flows

 

$

78,489

 

 

$

34,625

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

 

VOR BIOPHARMA INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Nature of the Business

Vor Biopharma Inc. (the “Company”) is a clinical-stage cell and genome engineering company that combines a novel patient engineering approach with targeted therapies to provide a single company solution for patients suffering from hematological malignancies. The Company’s proprietary platform leverages its expertise in hematopoietic stem cell (“HSC”) biology, genome engineering and targeted therapy development to genetically modify HSCs to remove surface targets expressed by cancer cells. The Company is headquartered in Cambridge, Massachusetts. The Company was incorporated on December 30, 2015.

Risks and Uncertainties

The Company is subject to a number of risks common to development stage companies in the biotechnology industry, including, but not limited to, risks of failure of preclinical studies and clinical trials, dependence on key personnel, protection of proprietary technology, reliance on third party organizations, risks of obtaining regulatory approval for any product candidate that it may develop, development by competitors of technological innovations, compliance with government regulations, adverse macroeconomic conditions and the need to obtain additional financing.

The Company anticipates that it will continue to incur significant operating losses for the next several years as it continues to develop its product candidates. As a result, the Company’s continued operations are dependent on its ability to raise additional funding. If the Company is unable to obtain additional funding on a timely basis, it may be forced to significantly curtail, delay, or discontinue one or more of its planned research or development programs or be unable to expand its operations.

Liquidity and Capital Resources

As of June 30, 2024, the Company had $85.9 million of cash, cash equivalents and marketable securities and an accumulated deficit of $398.7 million. The Company anticipates that it will continue to incur significant operating losses for the next several years as it continues to develop its product candidates. As a result, the Company’s continued operations are dependent on its ability to raise additional funding. Based on its current business plan and current capital resources, combined with the need to raise additional funding and the uncertainty regarding the availability of such additional funding, management has concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued. Management's plans to alleviate the conditions that raise substantial doubt regarding the Company’s ability to continue as a going concern include obtaining additional funding through equity or debt offerings and/or pursuant to collaboration or licensing arrangements. However, additional funding may not be available on terms acceptable to the Company or at all. The Company may also seek to reduce current spending requirements where necessary. Management has concluded the likelihood that its plans to successfully obtain sufficient additional funding from one or more of these sources, or adequately reduce expenditures, while reasonably possible, is less than probable.

If, for any reason, the Company utilizes its capital resources more quickly than anticipated or is unable to obtain additional funding on a timely basis, it may be required to revise its business plan and strategy. This may result in the Company significantly curtailing, delaying or discontinuing one or more of its research and development programs. As a result, the Company’s business, financial condition, and results of operations could be materially affected. The accompanying condensed consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets and liabilities that may be necessary if the Company were unable to continue as a going concern.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Certain comparative amounts have been reclassified to conform to the current period presentation, including the presentation of non-cash lease expense in the condensed consolidated statements of cash flows. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (“FASB”).

5


 

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies in developing the estimates and assumptions that are used in the preparation of the condensed consolidated financial statements. Management must apply significant judgment in this process. Management’s estimation process often may yield a range of potentially reasonable estimates and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: accrued expenses and research and development expenses.

Unaudited Interim Financial Information

The condensed consolidated financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

The accompanying condensed consolidated balance sheet as of December 31, 2023 has been derived from the Company’s audited consolidated financial statements for the year ended December 31, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”).

During the six months ended June 30, 2024, there have been no changes to the Company’s significant accounting policies as described in the 2023 Annual Report.

3. Marketable Securities

The amortized cost and estimated fair value of marketable securities, by contractual maturity, are as follows:

 

 

June 30, 2024

 

(in thousands)

 

Amortized Cost

 

 

Gross Unrealized Holding Gains

 

 

Gross Unrealized Holding Losses

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maturing after one year through five years

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasuries

 

 

9,932

 

 

 

 

 

 

(70

)

 

 

9,862

 

Total

 

$

9,932

 

 

$

 

 

$

(70

)

 

$

9,862

 

 

 

 

December 31, 2023

 

(in thousands)

 

Amortized Cost

 

 

Gross Unrealized Holding Gains

 

 

Gross Unrealized Holding Losses

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maturing in one year or less

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury Bill

 

$

8,806

 

 

$

6

 

 

$

 

 

$

8,812

 

U.S. Treasuries

 

 

97,086

 

 

 

12

 

 

 

(95

)

 

 

97,003

 

Total

 

$

105,892

 

 

$

18

 

 

$

(95

)

 

$

105,815

 

The following tables summarize the fair value and gross unrealized losses aggregated by category and the length of time that individual securities have been in an unrealized loss position:

 

 

June 30, 2024

 

 

 

Less than twelve months

 

 

Greater than twelve months

 

 

Total

 

(in thousands)

 

Fair value

 

 

Unrealized loss

 

 

Fair value

 

 

Unrealized loss

 

 

Fair value

 

 

Unrealized loss

 

U.S. Treasuries

 

 

9,862

 

 

 

(70

)

 

 

 

 

 

 

 

 

9,862

 

 

 

(70

)

Total

 

$

9,862

 

 

$

(70

)

 

$

 

 

$

 

 

$

9,862

 

 

$

(70

)

 

6


 

 

 

 

December 31, 2023

 

 

 

Less than twelve months

 

 

Greater than twelve months

 

 

Total

 

(in thousands)

 

Fair value

 

 

Unrealized loss

 

 

Fair value

 

 

Unrealized loss

 

 

Fair value

 

 

Unrealized loss

 

U.S. Treasuries

 

$

 

 

$

 

 

$

53,447

 

 

$

(95

)

 

$

53,447

 

 

$

(95

)

Total

 

$

 

 

$

 

 

$

53,447

 

 

$

(95

)

 

$

53,447

 

 

$

(95

)

The Company holds investment grade marketable securities considered to be in an unrealized loss position. Although these marketable securities are held at an unrealized loss position at June 30, 2024, the Company does not intend to sell the marketable securities prior to the value of the securities being recovered, and the Company has concluded that it is more likely than not that the marketable securities cost basis values will be recovered prior to sale of the securities and that there are no conditions or events that might require the Company to sell the securities before recovery of the cost basis occurs. Further, the Company did not record any impairments to marketable securities or reserves for credit losses related to its marketable debt securities during the periods presented.

4. Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:

 

 

June 30, 2024

 

(in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

75,890

 

 

$

 

 

$

 

 

$

75,890

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasuries

 

 

 

 

 

9,862

 

 

 

 

 

 

9,862

 

Total marketable securities

 

 

 

 

 

9,862

 

 

 

 

 

 

9,862

 

Restricted cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

 

2,413

 

 

 

 

 

 

 

 

 

2,413

 

Total

 

$

78,303

 

 

$

9,862

 

 

$

 

 

$

88,165

 

 

 

 

December 31, 2023

 

(in thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

31,164

 

 

$

 

 

$

 

 

$

31,164

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury Bill

 

 

8,812

 

 

 

 

 

 

 

 

 

8,812

 

U.S. Treasuries

 

 

 

 

 

97,003

 

 

 

 

 

 

97,003

 

Total marketable securities

 

 

8,812

 

 

 

97,003

 

 

 

 

 

 

105,815

 

Restricted cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

 

2,413

 

 

 

 

 

 

 

 

 

2,413

 

Total

 

$

42,389

 

 

$

97,003

 

 

$

 

 

$

139,392

 

The fair value of the Company’s cash equivalents and restricted cash equivalents is based on quoted market prices in active markets with no valuation adjustment. The fair value of marketable securities was determined based on observable market inputs. There were no transfers between levels during the six months ended June 30, 2024.

Prepaid expenses, accounts payable and accrued expenses are stated at their respective historical carrying values, which approximate fair value due to their short-term nature.

7


 

5. Property and Equipment, Net

Property and equipment, net consisted of the following:

 

 

 

June 30,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Laboratory equipment

 

$

10,090

 

 

$

10,028

 

Manufacturing equipment

 

 

7,065

 

 

 

6,936

 

Computer equipment

 

 

432

 

 

 

432

 

Furniture, fixtures and other

 

 

606

 

 

 

599

 

Construction in progress

 

 

 

 

 

146

 

Total

 

 

18,193

 

 

 

18,141

 

Less: Accumulated depreciation

 

 

(9,902

)

 

 

(8,091

)

Property and equipment, net

 

$

8,291

 

 

$

10,050

 

Depreciation expense for the three and six months ended June 30, 2024 was $0.9 million and $1.8 million, respectively, and for the three and six months ended June 30, 2023 was $0.9 million and $1.7 million, respectively.

6. Accrued Liabilities

Accrued liabilities consisted of the following:

 

 

 

June 30,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Employee-related expenses

 

$

3,408

 

 

$

5,962

 

Professional fees

 

 

791

 

 

 

1,245

 

Clinical expenses

 

 

1,999

 

 

 

1,495

 

Manufacturing expenses

 

 

564

 

 

 

842

 

Research and development expenses

 

 

665

 

 

 

1,059

 

Other

 

 

229

 

 

 

274

 

Total accrued liabilities

 

$

7,656

 

 

$

10,877

 

 

7. Stock-Based Compensation

2023 Inducement Plan

As of June 30, 2024, the Company had 3,045,937 shares of its common stock available for future issuance under the 2023 Inducement Plan.

2021 Equity Incentive Plan

As of June 30, 2024, the Company had 2,340,825 shares of its common stock available for future issuance under its 2021 Equity Incentive Plan.

Stock Options

The Company’s stock options generally vest over 48 months with 25% vesting after one year followed by ratable monthly vesting over the remaining three years and have a contractual term of 10 years. The weighted-average assumptions used principally in determining the fair value of options granted were as follows:

 

 

Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

Expected term (in years)

 

 

5.9

 

 

 

6.0

 

Expected volatility

 

 

89.8

%

 

 

81.9

%

Risk-free interest rate

 

 

4.2

%

 

 

3.7

%

Dividend yield

 

 

 

 

 

 

During the six months ended June 30, 2024 and 2023, the Company granted stock options to purchase 1,722,725 shares and 2,108,219 shares of its common stock, respectively, with a weighted-average grant-date fair value of $1.74 and $3.76 per share,

8


 

respectively. As of June 30, 2024, total unrecognized compensation expense related to stock options was $11.0 million, which is expected to be recognized over a weighted-average period of 2.5 years.

As of June 30, 2024, options for 5,150 shares of Company common stock with a weighted-average exercise price of $4.90 were exercised and unvested. An immaterial amount of underlying proceeds from the unvested exercises is recorded in other current liabilities on the condensed consolidated balance sheet.

Restricted Stock Units

During the six months ended June 30, 2024 and 2023, the Company granted 1,119,149 restricted stock units and 645,360 restricted stock units, respectively, with a weighted-average grant date fair value of $2.38 and $5.55 per share, respectively. As of June 30, 2024, total unrecognized compensation expense related to restricted stock units was $4.6 million, which is expected to be recognized over a weighted-average period of 2.3 years.

Employee Stock Purchase Plan

As of June 30, 2024, the Company had 1,894,294 shares of its common stock available for issuance under its Employee Stock Purchase Plan (“ESPP”).

During the six months ended June 30, 2024, the Company issued 74,326 shares with a weighted-average purchase price of $1.48 under the ESPP, which resulted in an immaterial amount of compensation expense. During the six months ended June 30, 2023, the Company issued 44,977 shares with a weighted-average purchase price of $3.76 under the ESPP, which resulted in an immaterial amount of compensation expense.

Stock-Based Compensation

Stock-based compensation expense was allocated as follows:

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

(in thousands)

 

2024

 

 

2023

 

2024

 

 

2023

 

Research and development

 

$

1,272

 

 

$

2,463

 

$

2,677

 

 

$

4,817

 

General and administrative

 

 

1,521

 

 

 

1,775

 

 

3,197

 

 

 

3,489

 

Total stock-based compensation expense

 

$

2,793

 

 

$

4,238

 

$

5,874

 

 

$

8,306

 

 

8. Leases

Cambridgepark Lease Amendments

On June 15, 2021, the Company entered into the first lease amendment (“First Lease Amendment”) and second lease amendment (“Second Lease Amendment” and, together with the First Lease Amendment, the “Lease Amendments”) with PPF Off 100 Cambridge Park Drive, LLC (the “Landlord”). The Lease Amendments amended the Company’s lease agreement for its corporate office and laboratory facilities with the Landlord in Cambridge, Massachusetts to add additional leased space in the same building (the “Amended Cambridgepark Lease”).

The First Lease Amendment and Second Lease Amendment commenced for accounting purposes on January 28, 2022 and April 29, 2022, respectively. The terms of the Lease Amendments are through September 2030 for approximately $8.4 million and $22.3 million in fixed payments for the First Lease Amendment and Second Lease Amendment, respectively. There are no options to extend the Lease Amendments.

Payments due associated with the Lease Amendments include fixed and variable payments. Variable payments relate to the Company’s share of the Landlord’s operating costs associated with the underlying assets and are recognized when the event on which those payments are assessed occurs. The Amended Cambridgepark Lease does not contain a residual value guarantee. The Lease Amendments term end dates are coterminous with the existing lease agreement. In conjunction with the Lease Amendments, the Company was required to increase its irrevocable standby letter of credit to $2.4 million for the benefit of the Landlord, which has been secured by money market investments and is presented as restricted cash equivalents.

9


 

For further information regarding the Company’s Cambridgepark lease, please see Note 9 to the consolidated financial statements included in the 2023 Annual Report.

The elements of lease expense were as follows:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating lease cost

 

$

1,951

 

 

$

1,948

 

 

$

3,902

 

 

$

3,901

 

Variable lease cost

 

 

679

 

 

 

661

 

 

 

1,209

 

 

 

1,258

 

Total lease cost

 

$

2,630

 

 

$

2,609

 

 

$

5,111

 

 

$

5,159

 

Amounts reported in the condensed consolidated balance sheets and the weighted-average lease term and discount rate information were as follows:

(in thousands except weighted-average amounts)

 

June 30, 2024

 

 

December 31, 2023

 

Assets

 

 

 

 

 

 

Operating lease right-of-use assets

 

$

37,565

 

 

$

40,048

 

Liabilities

 

 

 

 

 

 

Operating lease liabilities, current

 

$

4,113

 

 

$

3,830

 

Operating lease liabilities, non-current

 

 

29,707

 

 

 

31,830

 

Total lease liabilities

 

$

33,820