# NextCure, Inc.: Form 10-Q for the period ended Sep 30, 2023

- Company: [NextCure, Inc.](/companies/nxtc.md) (CIK 1661059)
- Form: 10-Q
- Filed: 2023-11-02
- Accepted by EDGAR: Nov 2, 2023, 16:20 ET
- Period: 2023-09-30
- Accession: 0001558370-23-017429
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1661059/000155837023017429/nxtc-20230930x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1661059/000155837023017429/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2023-07-01 to 2023-09-30 | $11.0m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2023-01-01 to 2023-09-30 | $36.1m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2023-07-01 to 2023-09-30 | −$15.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-01-01 to 2023-09-30 | −$51.8m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2023-07-01 to 2023-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-01-01 to 2023-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | −$14.3m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | −$48.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | −$0.51 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | −$1.73 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | −$0.51 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | −$1.73 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-07-01 to 2023-09-30 | 27,839,968 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-01-01 to 2023-09-30 | 27,814,655 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | −$42.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-01-01 to 2023-09-30 | $807.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-09-30 | $19.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $122.7m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $139.9m | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $6.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $13.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-09-30 | $126.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 32,218 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Quarterly Report and the audited financial information and related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and other disclosures, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, or our “2022 Annual Report.” Some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “should,” “due,” “estimate,” “expect,” “intend,” “hope,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “target,” “towards,” “forward,” “later,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or similar language. Forward-looking statements include, but are not limited to, statements about:*

- *our expectations regarding the timing, progress and results of preclinical studies and clinical trials for NC410, NC525, NC762 and any other product candidates we develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;*
- *the timing or likelihood of regulatory filings for NC410, NC525, NC762 and any other product candidates we develop and our ability to obtain and maintain regulatory approvals for such product candidates for any indication;*
- *the identification, analysis and use of biomarkers and biomarker data;*
- *development of patient selection assays and companion or complementary diagnostics for NC410, NC525, NC762 and any other product candidates we develop;*
- *our manufacturing capabilities and strategy, including the scalability of our manufacturing methods and processes;*
- *our expectations regarding the potential benefits, activity, effectiveness and safety of NC410, NC525, NC762 and any other product candidates we develop;*
- *our intentions and ability to successfully commercialize our product candidates;*
- *our expectations regarding the nature of the biological pathways we are targeting;*
- *our expectations for our Functional, Integrated, NextCure Discovery in Immuno-Oncology (“FIND-IO”) platform, including our ability to discover and advance product candidates using our FIND-IO platform;*
- *the potential benefits of and our ability to maintain our relationship and collaboration with Yale University;*
- *our estimates regarding our expenses, future revenues, capital requirements, our needs for or ability to obtain additional financing and the period over which we expect our current cash, cash equivalents and marketable securities to be sufficient to fund our operations;*
- *our intended reliance on and the performance of third parties, including collaborators, contract research organizations and third-party manufacturers;*
- *our ability to protect and enforce our intellectual property protection and the scope and duration of such protection;*
- *any failure of our information technology systems such as security breaches, loss of data and other disruptions;*
- *developments and projections relating to our competitors and our industry, including competing therapies; and*
- *the impact of current and future laws and regulations.*

*Forward-looking statements involve substantial risks and uncertainties that could cause actual results to differ materially from those projected in any forward-looking statement. Such risks and uncertainties include, among others: positive results in preclinical studies may not be predictive of the results of clinical trials; our limited operating history and not having any products approved for commercial sale; our history of significant losses; our need and ability to obtain additional financing on acceptable terms or at all; risks related to clinical development, marketing approval and commercialization; the unproven approach to the discovery and development of product candidates based on our FIND-IO platform; and our dependence on key personnel. More detailed information on these and additional factors that could affect our actual results are described under the heading “Risk Factors” in our 2022 Annual Report and in our other filings with the Securities and Exchange Commission (“SEC”). You should not place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date of this report, and we assume no obligation to update any forward-looking statements, even if expectations change.*

### Overview

We are a clinical-stage biopharmaceutical company committed to discovering and developing novel, first-in-class immunomedicines to treat cancer and other immune-related diseases by restoring normal immune function. We view the immune system holistically and, rather than target one specific immune cell type, we focus on understanding biological pathways, the interactions of cells and the role each interaction plays in an immune response. Through our proprietary FIND-IO, platform, we study various immune cells to discover and understand targets and structural components of immune cells and their functional impact in order to develop immunomedicines. We are focused on patients who do not respond to current therapies, patients whose cancer progresses despite treatment and patients with cancer types not adequately addressed by available therapies. We are committed to discovering and developing first-in-class immunomedicines, which are immunomedicines that use new or unique mechanisms of action to treat a medical condition.

Our product candidate NC410 is a fusion protein of LAIR-2, a naturally occurring soluble version of and decoy protein for LAIR-1 and is designed to block immune suppression mediated by LAIR-1. In June 2020, we initiated a Phase 1/2 clinical trial of NC410 in patients with advanced or metastatic solid tumors. The Phase 1 dose-escalation portion of this open-label trial was designed to evaluate the safety and tolerability of NC410 and determine its pharmacologically active and/or maximum tolerated dose. In October 2022, we announced the initiation of a Phase 1b/2 clinical trial to evaluate NC410 in combination with KEYTRUDA® (pembrolizumab), Merck’s anti-PD-1 therapy, in immune checkpoint refractory patients (colorectal, esophageal, endometrial and head and neck cancers) or immune checkpoint naïve solid tumor patients (colorectal and ovarian cancers). We plan to provide an update on the Phase 1b portion of the trial by year end.

Our product candidate NC762 is a monoclonal antibody that binds specifically to human B7 homolog 4 protein, or “B7-H4”, a protein expressed on multiple tumor types. In July 2021, we initiated a Phase 1/2 clinical trial of NC762 in patients with lung cancer, breast cancer, ovarian cancer or potentially other tumor types. The Phase 1 dose-escalation portion of this open-label trial was designed to evaluate the safety and tolerability of NC762 and determine its pharmacologically active and/or maximum tolerated dose. In November 2022, we announced initial data from the Phase 1 portion of this trial which indicate that NC762 appears to be well tolerated. Safety expansion studies are ongoing with the intent of selecting a recommended Phase 2 dose. We plan to provide an update on the Phase 1b portion of the trial by year end.

Our product candidate NC525 is a novel LAIR-1 antibody that selectively targets Acute Myeloid Leukemia, or “AML”, blast cells and leukemic stem cells, or “LSCs”. Preclinical data show that NC525 kills AML blast cells and LSCs while sparing hematopoietic stem and progenitor cells, or “HSPCs”. In February 2023 we initiated a Phase 1 trial for NC525 to evaluate the safety and preliminary efficacy of NC525 in AML, high-risk myelodysplastic syndrome, and chronic myelomonocytic leukemia (CMML). We plan to provide an operational update on the Phase 1a portion of the trial by year end.

In November 2022, the Company entered into a Research Collaboration and Co-Development Agreement (“Agreement”) with LegoChem to develop up to three antibody drug conjugates. Under the terms of the Agreement, both parties equally share the costs of developing the molecules and profits on commercialized products. In April 2023, the parties designated the initial co-development candidate under the Agreement will target B7-H4. LNCB74, our first candidate, will utilize a NextCure B7-H4 antibody and LegoChem’s ConjuAll TM ADC technology. Early Phase 1 data presented in October 2023 by other companies at the European Society for Medical Oncology (ESMO) 2023 Congress demonstrated the efficacy of attacking this target in selected tumor types.

We recently announced two novel preclinical programs, NC605 and NC181. NC605, an anti-Siglec-15 antibody, preclinical data reported reduced bone loss and enhanced bone quality in mice with osteogenesis imperfecta (OI). OI is a rare disorder that results in high bone turnover, abnormal bone formation, bone fragility and recurrent fractures. We are evaluating the future development path for this candidate which may include seeking a partner for further development. The second preclinical program, NC181, is a humanized antibody targeting ApoE4 for the treatment of Alzheimer’s disease (AD). In preclinical AD animal models, NC181 has demonstrated amyloid clearance, prevention of amyloid deposition, plaque clearance and other important findings. We are seeking a partner for further development of this candidate.

### Financial Overview

Since commencing operations in 2015, we have devoted substantially all our efforts and financial resources to organizing and staffing our company, identifying business development opportunities, raising capital, securing intellectual property rights related to our product candidates, building and optimizing our manufacturing capabilities, and conducting discovery, research and development activities for our product candidates, discovery programs and FIND-IO platform.

To date, we have not generated any revenue from product sales and have financed our operations primarily through proceeds from public offerings of our common stock, with private placements of our preferred stock and with upfront fees received under our former research and development collaboration agreement. Since inception through September 30, 2023, we raised approximately $423 million in gross proceeds from the sale of equity instruments and had received a $25 million upfront payment from our former collaboration partner. Our net loss for the three months ended September 30, 2023 and 2022, was $14.3 million and $18.9 million, respectively. Our net loss for the nine months ended September 30, 2023 and 2022, was $48.3 million and $57.4 million, respectively. As of September 30, 2023, we had an accumulated deficit of $310.0 million, primarily as a result of research and development and general and administrative expenses. We do not expect to generate product revenue unless and until we obtain marketing approval and commercialize a product candidate, and we cannot assure you that we will ever generate significant revenue or profits.

As of September 30, 2023, we had cash, cash equivalents and marketable securities of $118.2 million. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations into mid-2025. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

We expect to incur substantial expenditures in the foreseeable future as we advance our product candidates through clinical development, the regulatory approval process and, if approved, commercialization. Specifically, in the near term, we expect to incur substantial expenses relating to our Phase 1b/2 clinical trial of NC410 in combination with pembrolizumab, our ongoing Phase 1/2 clinical trial for NC762, our Phase 1 clinical trial for NC525, and other research and development activities. We expect to continue to incur significantly increased costs as a result of operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company.

We will need substantial additional funding to support our continuing operations and to pursue our development strategy. Until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our operations through a combination of public and private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials, or other research and development activities or one or more of our development programs.

### Components of Our Results of Operations

### Operating Expenses

#### Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our clinical trials, discovery efforts, research activities, and development and testing of our product candidates:

- expenses incurred under agreements with third parties, including agreements with third parties that conduct research, preclinical activities or clinical trials on our behalf;
- costs of outside consultants, including their fees, stock-based compensation and related travel expenses;
- the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study and clinical trial materials;
- salaries, benefits and other related costs, including stock-based compensation, for personnel engaged in research and development functions; and
- facility-related expenses, which include direct depreciation costs and allocated expenses for rent and maintenance of facilities and other operating costs.

We expense research and development costs as incurred. Our expenses related to clinical trials are based on actual costs incurred and estimates of other incurred costs. These estimated costs are based on several factors, including patient enrollment and related expenses at clinical investigator sites, contract services received, consulting agreement costs and efforts expended under contracts with research institutions and third-party contract research organizations that conduct and manage clinical trials on our behalf. We generally accrue estimated costs related to clinical trials based on contracted amounts applied to the level of patient enrollment and other activity according to the protocol. If future timelines or contracts are modified based on changes in the clinical trial protocol or scope of work to be performed, we would modify our estimates of accrued expenses accordingly on a prospective basis. Historically, any such modifications have not been material.

Research and development activities are central to our business model. We expect that our research and development expenses will continue to increase substantially for the foreseeable future as we advance our product candidates through development and expand the number of trials we are conducting and the patients enrolled in those trials, as we utilize our current good manufacturing practice, or “cGMP”, manufacturing capacity, including to provide drug supply of NC410, NC762 and NC525 for future clinical trials.

We cannot determine with certainty the duration and costs of future clinical trials of NC410, NC762, NC525 or any other product candidate we may develop or if, when or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we may obtain marketing approval. We may never succeed in obtaining marketing approval for any product candidate. The duration, costs and timing of clinical trials and development of NC410, NC762, NC525 and any other product candidate we may develop will depend on a variety of factors, including:

- the scope, progress, results and costs of clinical trials of NC410, NC762 and NC525, as well as of any future clinical trials of other product candidates and other research and development activities that we may conduct;
- uncertainties in selection of indications, clinical trial design and patient enrollment rates;
- the probability of success for our product candidates, including safety and efficacy, early clinical data, competition, ease and ability of manufacturing and commercial viability;
- significant and changing government regulation and regulatory guidance;
- the timing and receipt of any development or marketing approvals; and
- the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

A change in the outcome of any of these variables with respect to the development of a product candidate could lead to a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time to complete clinical development for any such product candidate.

#### General and Administrative Expenses

General and administrative expenses consist primarily of personnel related costs, including payroll and stock- based compensation, for personnel in executive, finance, human resources, business and corporate development and other administrative functions, professional fees for legal, intellectual property, consulting and accounting services, rent and other facility-related costs, depreciation and other general operating expenses not otherwise classified as research and development expenses. General and administrative expenses also include all patent-related costs incurred in connection with filing and prosecuting patent applications, which are expensed as incurred.

We anticipate that our general and administrative expenses will increase during the next few years as a result of staff costs, additional occupancy costs, higher legal and accounting fees, investor relations costs, higher insurance premiums and other compliance costs.

### Other Income, Net

Other income, net consists primarily of interest income earned on marketable securities.

### Results of Operations

### Comparison of the Three and Nine Months Ended September 30, 2023 and 2022

The following table summarizes our results of operations for the periods indicated (in thousands):

| ​ ​ ​ ​ Operating expenses: | ​ ​ ​ | ​ ​ Three Months Ended September 30, 2023 ​ | ​ | ​ ​ 2022 ​ | ​ ​ | ​ ​ ​ ​ ​ ​ Change ​ | ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2023 ​ | ​ | ​ ​ 2022 ​ | ​ ​ ​ | ​ ​ ​ ​ ​ ​ Change ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Research and development | ​ | $11,010 | ​ | $13,528 | ​ | $(2,518) | ​ | $36,104 | ​ | $41,377 | ​ | $(5,273) |
| General and administrative | ​ | 4,608 | ​ | 5,711 | ​ | (1,103) | ​ | 15,743 | ​ | 16,761 | ​ | (1,018) |
| Loss from operations | ​ | (15,618) | ​ | (19,239) | ​ | 3,621 | ​ | (51,847) | ​ | (58,138) | ​ | 6,291 |
| Other income, net | ​ | 1,317 | ​ | 328 | ​ | 989 | ​ | 3,591 | ​ | 705 | ​ | 2,886 |
| Net loss | ​ | $(14,301) | ​ | $(18,911) | ​ | $4,610 | ​ | $(48,256) | ​ | $(57,433) | ​ | $9,177 |

#### Research and Development Expenses

The following table summarizes our research and development expenses by product candidate for the periods indicated (in thousands):

*(in thousands)*

| ​ ​ ​ External research and development expenses: | ​ ​ ​ ​ | ​ ​ Three Months Ended September 30, 2023 ​ ​ | ​ ​ | ​ ​ 2022 ​ ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Change ​ ​ | ​ ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2023 ​ ​ | ​ ​ | ​ ​ 2022 ​ ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Change ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NC410 | ​ | $1,526 | ​ | $1,465 | ​ | $61 | ​ | $5,336 | ​ | $4,785 | ​ | $551 |
| NC762 | ​ | ​ 740 | ​ | ​ 1,448 | ​ | ​ (708) | ​ | ​ 2,834 | ​ | ​ 3,593 | ​ | ​ (759) |
| NC525 | ​ | ​ 1,085 | ​ | ​ 1,124 | ​ | ​ (39) | ​ | ​ 2,429 | ​ | ​ 3,475 | ​ | ​ (1,046) |
| Other programs and preclinical development | ​ | ​ 2,035 | ​ | ​ 3,373 | ​ | ​ (1,338) | ​ | ​ 7,612 | ​ | ​ 11,944 | ​ | ​ (4,332) |
| Total external research and development expenses | ​ | ​ 5,386 | ​ | ​ 7,410 | ​ | ​ (2,024) | ​ | ​ 18,211 | ​ | ​ 23,797 | ​ | ​ (5,586) |
| Total internal research and development expenses | ​ | ​ 5,624 | ​ | ​ 6,118 | ​ | ​ (494) | ​ | ​ 17,893 | ​ | ​ 17,580 | ​ | ​ 313 |
| Total research and development expenses |  | $11,010 | ​ | $13,528 | ​ | $(2,518) | ​ | $36,104 | ​ | $41,377 | ​ | $(5,273) |

We do not allocate personnel-related costs, including stock-based compensation costs, or other indirect costs to specific programs, as they are deployed across multiple projects under development and discovery and, as such, are separately classified as internal research and development expenses in the table above.

Research and development expenses for the three months ended September 30, 2023 decreased $2.5 million, or 19% compared to the three months ended September 30, 2022, primarily due to lower costs associated with our Phase 1/2 clinical trial of NC762 in patients with lung cancer, breast cancer, ovarian cancer or potentially other tumor types, as well as lower costs on other programs and preclinical development.

Research and development expenses for the nine months ended September 30, 2023 decreased $5.3 million, or 13% compared to the nine months ended September 30, 2022, primarily due to the decision to discontinue clinical development of NC318 announced in the fourth quarter of 2022 and lower costs associated with NC525, as this program initiated a phase 1 trial in February 2023, and lower costs on other programs and preclinical development.

#### General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2023 decreased by $1.1 million compared to the three months ended September 30, 2022. The increase was primarily due to lower payroll, lower stock compensation expense, lower insurance costs and lower legal costs.

General and administrative expenses for the nine months ended September 30, 2023 decreased by $1.0 million compared to the nine months ended September 30, 2022. The decrease was primarily due to lower stock compensation costs, lower insurance costs and lower professional fees partially offset by higher legal costs.

#### Other Income, Net

Other income, net for the three months ended September 30, 2023 increased by $1.0 million compared to the three months ended September 30, 2022, due to higher interest income as a result of higher interest rates and lower amortization on our investments.

Other income, net for the nine months ended September 30, 2023 increased by $2.9 million compared to the nine months ended September 30, 2022, due to higher interest income as a result of higher interest rates and lower amortization on our investments.

### Liquidity and Capital Resources

We have financed our operations primarily with proceeds from public offerings of our common stock, private placements of our preferred stock and upfront fees received under the Company’s former agreement with Eli Lilly and Company, which was terminated in March 2020 (the “Lilly Agreement”). On May 13, 2019, we closed our IPO, in which we sold 5,750,000 shares of common stock at a public offering price of $15.00 per share, for net offering proceeds to us of approximately $77.0 million after deducting underwriting discounts and commissions and offering expenses. On November 19, 2019, we completed an underwritten public offering in which we sold 4,077,192 shares of common stock at a public offering price of $36.75 per share. On December 2, 2019, the underwriters exercised in full their option to purchase an additional 611,578 shares of common stock at a public offering price of $36.75. Net offering proceeds to us were approximately $160.9 million after deducting underwriting discounts and commissions and offering expenses. Since inception, we have received aggregate gross proceeds of $164.4 million from the sale and issuance of shares of our preferred stock. In addition, in November 2018, we received an upfront payment of $25.0 million in cash from Lilly pursuant to the Lilly Agreement. Our cash and cash equivalents are held in money market funds.

On August 4, 2023, the Company entered into a sales agreement (the “Sales Agreement”) with Leerink Partners LLC (the “Agent”), pursuant to which the Company may sell, from time to time, up to an aggregate sales price of $75 million of its common stock through the Agent in negotiated transactions that are deemed to be an “at the market offering.” The Agent will be entitled to compensation equal to 3.0% of the gross proceeds from the sale of all shares of common stock sold through it as Agent under the Sales Agreement. Actual sales will depend on a variety of factors to be determined by the Company from time to time, including, among other things, market conditions, the trading price of the common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company. We have not yet sold any shares of our common stock pursuant to the Sales Agreement.

As of September 30, 2023, we had cash, cash equivalents and marketable securities of $118.2 million. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operations into mid-2025.

We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. We may seek to raise capital through sale of equity, debt financings, strategic alliances and licensing arrangements. Adequate additional funding may not be available to us on acceptable terms or at all. If we fail to raise capital or enter into such arrangements as and when needed, we may have to significantly delay, scale back or discontinue the development of our product candidates or delay our efforts to expand our pipeline of product candidates.

### Cash Flows

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented below (in thousands):

| ​ ​ ​ ​ Net cash (used in) provided by: | ​ ​ ​ | ​ ​ Nine Months Ended September 30, 2023 ​ | ​ | ​ ​ 2022 ​ |
| --- | --- | ---: | --- | ---: |
| Operating activities | ​ | $(42,304) | ​ | $(44,937) |
| Investing activities | ​ | 35,110 | ​ | 63,511 |
| Financing activities | ​ | 83 | ​ | 139 |
| Net increase (decrease) in cash and cash equivalents | ​ | $(7,111) | ​ | $18,713 |

#### Net Cash Used in Operating Activities

Net cash used in operating activities was $42.3 million for the nine months ended September 30, 2023, which was primarily the result of our net loss of $48.3 million and a $3.1 million net use of operating assets and liabilities, partially offset by non-cash charges for depreciation and amortization of $2.9 million and stock-based compensation of $6.2 million. Net cash used in operating activities was $44.9 million for the nine months ended September 30, 2022, which was primarily due to our net loss of $57.4 million, partially offset by non-cash charges for depreciation and amortization of $3.1 million, amortization of premiums and discounts on marketable securities of $2.6 million, and stock-based compensation of $7.2 million.

#### Net Cash Provided by Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2023 was $35.1 million, which was primarily due to net proceeds from sales and maturities of marketable securities of $35.9 million, partially offset by purchases of property and equipment of $0.8 million. Net cash provided by investing activities for the nine months ended September 30, 2022 was $63.5 million, which was primarily due to net proceeds from marketable securities of $64.8 million, partially offset by purchases of property and equipment of $1.3 million.

#### Net Cash Provided by Financing Activities

Net cash provided by financing activities was $0.1 million for the nine months ended September 30, 2023 representing sales of our stock under the Employee Stock Purchase Plan (ESPP) and the exercise of stock options. Net cash provided by financing activities was $0.1 million for the nine months ended September 30, 2022, representing sales of our stock under the Employee Stock Purchase Plan (ESPP) and the exercise of stock options.

### Contractual Obligations and Commitments

There have been no material changes to our contractual obligations during the nine months ended September 30, 2023, as compared to those disclosed in our 2022 Annual Report.

### Critical Accounting Policies, Significant Judgments and Use of Estimates

Our condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP”. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. The most significant assumptions used in the financial statements are the underlying assumptions used in revenue recognition and valuing share-based compensation, including the fair value of our common stock in periods before our IPO. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

During the nine months ended September 30, 2023, there were no material changes to our critical accounting policies reported in our 2022 Annual Report.

### Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

### Recent Accounting Pronouncements

See Note 2 to our unaudited condensed financial statements included elsewhere in this Quarterly Report for a discussion of recent accounting pronouncements that may impact our financial position and results of operations.

### Emerging Growth Company Status

As an emerging growth company, or “EGC”, under the Jumpstart Our Business Startups Act of 2012, or the “JOBS Act”, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. We have elected to take advantage of the extended transition period for adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies.

## Market risk

As filed, 203 characters.

As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the “Exchange Act”, we are not required to provide the information requested by this Item.

## Controls and procedures

As filed, 1,256 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of September 30, 2023. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the quarter ended September 30, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Filed Nov 2, 2023.
Source: SEC EDGAR, the filing index for accession 0001558370-23-017429. Last ingested by Listed: Nov 2, 2026, 06:06 ET. No prices; not investment advice.