On August 1, 2024 Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH) (Aurinia or the Company) reported its financial results for the second quarter and six months ended June 30, 2024 (Press release, Aurinia Pharmaceuticals, AUG 1, 2024, View Source [SID1234645247]). Amounts are expressed in U.S. dollars.

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Total net revenue was $57.2 million for the three months ended June 30, 2024, and $41.5 million for the same period in 2023, representing growth of approximately 38%. Year to date total net revenue was $107.5 million for the six months ended June 30, 2024, compared to $75.9 million for the same period in 2023, representing growth of approximately 42%.

Net product revenue was $55.0 million for the three months ended June 30, 2024, and $41.1 million for the same period in 2023, representing growth of approximately 34%. Net product revenue was $103.1 million for the six months ended June 30, 2024, and $75.4 million for the same period in 2023, representing growth of approximately 37%. Net product revenue in the second quarter included sales of semi-finished product to Otsuka Pharmaceutical Co., Ltd. (Otsuka) for distribution in Europe and in anticipation of product approval in Japan.

"Our quarter-over-quarter growth in the second quarter is a result of our continued focus on commercial execution and business fundamentals. We are well prepared as we exit the first half of 2024, with upcoming innovative commercial initiatives targeting rheumatologists, the advancement of our AUR200 pipeline asset, and the anticipated approval of LUPKYNIS in Japan. Additionally, achieving positive free cash flow ahead of our initial projections further strengthens our financial position and allows more flexibility to explore opportunities to diversify our portfolio," said Peter Greenleaf, President and Chief Executive Officer of Aurinia.

The Company anticipates Japanese regulatory authorities’ approval of LUPKYNIS in the second half of this year, based on the JNDA that Otsuka filed in November 2023 for approval of LUPKYNIS to treat adults with LN. Upon approval, the Company expects to receive a milestone payment of $10 million with low double-digit royalties on net sales once launched.

Additionally, the Company is moving forward with development of its pipeline asset AUR200, a differentiated, potential next generation therapy for autoimmune diseases that targets both BAFF (B-cell Activating Factor) and APRIL (A Proliferation-Inducing Ligand).

"We are thrilled to advance AUR200, which has the potential to serve as a best-in-class treatment in disease areas with high unmet need. We intend to develop it in disease states where there are currently few market entrants, including exploring one larger indication and one fast-to-market smaller indication that meets the FDA criteria for orphan and rare diseases," said Dr. Greg Keenan, Chief Medical Officer of Aurinia.

First patients are expected to enter the Phase 1 Single Ascending Dose (SAD) study of AUR200 in the third quarter of 2024. Data from the SAD study, including safety, tolerability, pharmacokinetics, and biomarkers, is anticipated in the first half of 2025. The Company anticipates funding this development program with available cash flow, which is not anticipated to impact previously announced post restructuring operating expense targets. As previously reported, the Company expects to recognize $50 to $55 million in annual cost savings following the restructuring, with approximately 75% of that recognized in 2024.

For the fiscal year 2024, the Company is narrowing its net product revenue guidance range to $210 to $220 million, from the previously established range of $200 to $220 million. The guidance range is based on assumptions regarding historical run rates for patient start forms (PSF), patients restarting therapy, hospital fills, conversion rates, time to convert, persistency, and pricing.

Second Quarter 2024 Highlights

In the second quarter of 2024 the Company:

Achieved 22% growth in patients on LUPKYNIS therapy, with approximately 2,336 patients on therapy as of June 30, 2024, compared to 1,911 as of June 30, 2023.
Added 428 PSFs and approximately 127 new patients who were either restarting LUPKYNIS or receiving it through a hospital pharmacy in the second quarter, compared to 451 PSFs in the prior year second quarter.
Added approximately 538 PSFs and approximately 155 new patients from restarts and the hospital channel from April 1, 2024, through July 31, 2024.
Sustained conversion rates, with approximately 85% of PSFs converted to patients on therapy.
Sustained time to convert, with approximately 60% of patients on therapy by 20 days.
Maintained high overall adherence rate at approximately 88%.
Continued strong persistency, with approximately 56% of patients remaining on therapy at 12 months, 51% at 15 months, and 46% at 18 months.
Financial Results for the Three and Six Months Ended June 30, 2024

Total net revenue was $57.2 million and $41.5 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Total net revenue was $107.5 million and $75.9 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

Net product revenue was $55.0 million and $41.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Net product revenue was $103.1 million and $75.4 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The increase is primarily due to an increase in sales of LUPKYNIS to the Company’s two main specialty pharmacies, driven predominantly by further penetration of the LN market. Additionally, Aurinia had sales of semi-finished product to Otsuka as Otsuka continues to commercialize in its territories.

The U.S. penetration can be demonstrated by a total of approximately 2,336 patients on therapy as of June 30, 2024, compared to approximately 1,911 patients on therapy as of June 30, 2023. Additionally, the 12-month persistency rate has increased to 56% at June 30, 2024 from approximately 54% at June 30, 2023.

License, collaboration and royalty revenue was $2.2 million and $0.4 million for the three months ended June 30, 2024 and June 30, 2023, respectively. License, collaboration and royalty revenue was $4.4 million and $0.5 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The increase is primarily due to manufacturing services revenue from Otsuka related to shared capacity services that commenced in late June 2023.

Total cost of sales and operating expenses, inclusive of a restructuring charge in the second quarter of 2024, were $58.7 million and $57.7 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Total cost of sales and operating expenses inclusive of a restructuring charge were $122.3 million and $121.7 million for the six months ended June 30, 2024 and June 30, 2023, respectively. Further breakdown of cost of sales and operating expense drivers and fluctuations are highlighted in the following paragraphs.

Cost of sales were $8.9 million and $1.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Cost of sales were $16.7 million and $2.0 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The increase is primarily due to the amortization of the monoplant finance right of use asset, which was placed into service in late June 2023, semi-finished product sales to Otsuka and increased sales of LUPKYNIS (voclosporin).

Gross margin was approximately 84% and 96% for the three months ended June 30, 2024 and June 30, 2023, respectively. Gross margin was approximately 85% and 97% for the six months ended June 30, 2024 and June 30, 2023, respectively.

SG&A expenses, inclusive of share-based compensation, were $44.9 million and $47.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. SG&A expenses, inclusive of share-based compensation, were $92.6 million and $97.2 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The decrease is primarily due to lower employee and overhead costs as a result of a reduction in general and administrative headcount, which occurred late in the first quarter of 2024 partially offset by an increase in legal fees.

Non-cash SG&A share-based compensation expense included within SG&A expenses was $8.1 million and $9.8 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Non-cash SG&A share-based compensation expense included within SG&A expenses was $15.6 million and $17.4 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

R&D expenses, inclusive of share-based compensation expense, were $4.1 million and $12.7 million for the three months ended June 30, 2024 and June 30, 2023, respectively. R&D expenses, inclusive of share-based compensation expense, were $9.6 million and $25.8 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The primary drivers for the decrease were lower employee costs due to a reduction in headcount, which occurred late in the first quarter of 2024, a decrease of CRO and developmental expenses related to ceasing development of Aurinia’s AUR300 program and timing of expenses related to AUR200.

Non-cash R&D share-based compensation expense included within R&D expense was $0.1 million and $2.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Non-cash R&D share-based compensation expense included within R&D expense was $(2.1) million and $3.7 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The non-cash R&D share-based compensation credit in the six months ended June 30, 2024 is due to the reversals of expense for forfeitures related to a reduction in headcount in the first quarter of 2024.

Restructuring expenses were approximately $1.1 million and nil for the three months ended June 30, 2024 and June 30, 2023, respectively. Restructuring expenses were approximately $7.8 million and nil for the six months ended June 30, 2024 and June 30, 2023, respectively. Restructuring expenses primarily included employee severance, one-time benefit payments and contract termination expenses.

Other income, net was $0.3 million and $3.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Other income, net was $4.4 million and $3.3 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The change is primarily driven by changes in the fair value assumptions related to Aurinia’s deferred compensation liability and the foreign exchange remeasurement of the monoplant lease liability, which commenced in June 2023 and is denominated in CHF.

Interest income was $4.2 million and $4.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Interest income was $8.7 million and $7.9 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

Interest expense was $1.2 million and $0.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Interest expense was $2.5 million and $0.1 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The interest expense is due to the monoplant finance lease, which commenced in June 2023.

For the three months ended June 30, 2024, Aurinia recorded net income of $0.7 million or $0.01 net income per common share, as compared to a net loss of $11.5 million or $(0.08) net loss per common share for the three months ended June 30, 2023. For the six months ended June 30, 2024, Aurinia recorded a net loss of $10.0 million or $(0.07) net loss per common share, as compared to a net loss of $37.7 million or $(0.26) net loss per common share for the three months ended June 30, 2023.

Financial Liquidity at June 30, 2024

As of June 30, 2024, Aurinia had cash, cash equivalents, restricted cash and investments of $330.7 million compared to $350.7 million at December 31, 2023. The decrease is primarily related to the continued investment in commercialization activities and post approval commitments of our approved drug, LUPKYNIS, monoplant payments, share repurchases and restructuring related payments, partially offset by an increase in cash receipts from sales of LUPKYNIS and cash payments from Otsuka.

Cash generated from operations and non-GAAP free cash flow generated were $15.8 million for the three months ended June 30, 2024 compared to cash used in operations of $2.8 million and non-GAAP free cash flow used of $3.0 million for the three months ended June 30, 2023. Cash used in operations and non-GAAP free cash flow used were $2.8 million for the six months ended June 30, 2024 compared to cash used in operations of $34.5 million and non-GAAP free cash flow used of $35.0 million for the six months ended June 30, 2023.

Free cash flow is a non-GAAP financial measure calculated by subtracting purchases of property and equipment from net cash provided by or used in operating activities. Free cash flow reflects a view of Aurinia’s liquidity that, when viewed with the Company’s GAAP results, provides a more complete understanding of factors and trends affecting Aurinia’s cash flows. The Company believes it is a more conservative measure of cash flow since capital expenditures are necessary for ongoing operations. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate the principal portion of payments made or expected to be made on finance lease obligations. Therefore, the Company believes it is important to view free cash flow as a complement to its entire consolidated statements of cash flows.

A reconciliation of free cash flow to its most directly comparable GAAP measure, net cash provided by or used in operating activities, is set out in the Condensed Consolidated Statement of Cash Flows included at the end of this press release.

Share Repurchase Program

As previously announced, Aurinia’s Board of Directors approved a share repurchase program of up to $150 million common shares of the Company. Canadian securities regulators also granted exemptive relief for the Company’s share repurchase program, authorizing the Company to purchase up to 15 percent of its issued and outstanding shares in any 12-month period for up to 36 months. Through July 31, 2024 Aurinia has repurchased 3.4 million shares for approximately $18.6 million at an average cost of $5.36. The Company expects to fund any future discretionary share repurchases from cash flows from operations and cash currently on hand.

This press release is intended to be read in conjunction with the Company’s unaudited condensed consolidated financial statements and Management’s Discussion and Analysis for the quarter and six months ended June 30, 2024 in the Company’s Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, including risk factors disclosed therein, which will be accessible on Aurinia’s website at www.auriniapharma.com, on SEDAR at www.sedarplus.ca or on EDGAR at www.sec.gov/edgar.

Conference Call Details

Aurinia will host a conference call and webcast today, August 1, 2024, at 8:30 AM ET to discuss the quarter and six months ended June 30, 2024, financial results. The link to the audio webcast is available here or on Aurinia’s corporate website at www.auriniapharma.com under "News/Events" through the Investors section. To join the conference call, please dial +1 (866) 682-6100 / +1 (862) 298-0702 (Toll-free U.S. & Canada). A replay of the webcast will be available on Aurinia’s website.

On August 1, 2024 Arbutus Biopharma Corporation (Nasdaq: ABUS) ("Arbutus" or the "Company"), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop a functional cure for people with chronic hepatitis B virus (cHBV) infection, reported second quarter 2024 financial results and provides a corporate update (Press release, Arbutus Biopharma, AUG 1, 2024, View Source [SID1234645246]).

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"At the EASL Congress we reported impressive imdusiran data. I’m particularly excited that in the IM-PROVE I clinical trial we saw undetectable HBsAg in 67% of those patients with baseline HBsAg less than 1000 IU/mL who were treated with 48 weeks of imdusiran and 24 weeks of IFN," said Michael J. McElhaugh, Interim President and Chief Executive Officer of Arbutus Biopharma. "In addition, these patients stopped all therapy and in early follow-up have maintained undetectable HBsAg and HBV DNA, a precursor to a functional cure. With these encouraging data, we continue to be optimistic about imdusiran as a potential cornerstone therapeutic in a treatment regimen to functionally cure cHBV."

Mr. McElhaugh continued, "We intend to focus our existing resources on conducting a Phase 2b clinical trial with imdusiran, assuming continued positive data. This has the potential to create a true inflection point for both Arbutus and HBV patients. To ensure we have the resources to conduct such a program, we have made the difficult decision to discontinue our HBV research efforts and reduce our headcount leading to a projected cash runway into the fourth quarter of 2026. I want to express my sincere gratitude to those impacted by the workforce reduction for their invaluable contributions to our mission and their dedication to helping HBV patients."

Clinical Development Update

Imdusiran (AB-729, RNAi Therapeutic)

At the EASL Congress in June, end-of-treatment data was presented from IM-PROVE I (AB-729-201), a Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of the combination of imdusiran, nucleos(t)ide analogue (NA) therapy and pegylated interferon alfa-2a (IFN) in patients with cHBV. The data showed that 33.3% (n=4/12) of patients in Cohort A1 receiving 48 weeks of imdusiran combined with a short course of IFN (24-weeks) and NA therapy, achieved undetectable HBsAg at the end-of-treatment that was maintained in 100% of these patients 24 weeks after completing imdusiran and IFN treatment. Undetectable HBsAg was achieved in 67% of those patients with HBsAg less than 1000 IU/mL at baseline. A total of six patients who received 24 weeks of IFN (n=4 Cohort A1; n=2 Cohort A2) seroconverted, with HBsAg loss accompanied by high titers of anti-HBsAg antibodies. All six of these patients have stopped NA therapy, with two of those patients reaching 12 weeks off all therapy with sustained undetectable levels of HBsAg and HBV DNA. The combination of imdusiran and IFN in this clinical trial was generally safe and well-tolerated.
Also at the EASL Congress in June, end-of treatment data was presented from the IM-PROVE II (AB-729-202) Phase 2a clinical trial evaluating the safety and immunogenicity of imdusiran, NA therapy and Barinthus Bio’s VTP-300, an HBV antigen-specific immunotherapy. The data showed that at 24-weeks post-end of treatment with imdusiran and VTP-300, statistical significance (p<0.05) was achieved in HBsAg levels between the treatment arm (n=5) and placebo (n=6). In addition, more patients maintained HBsAg thresholds of <100 IU/mL and <10 IU/mL when administered VTP-300 vs. placebo at 24-weeks post end-of-treatment. The combination of imdusiran and VTP-300 in this clinical trial was generally safe and well-tolerated.
IM-PROVE II includes an additional cohort of patients who will receive imdusiran plus NA therapy for 24 weeks followed by VTP-300 plus up to two low doses of nivolumab, an approved anti-PD-1 monoclonal antibody. Arbutus is on-track to report preliminary end-of-treatment data from this additional cohort in the second half of 2024.
Arbutus has terminated its Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of imdusiran and NA therapy in combination with intermittent low doses of durvalumab, an approved anti-PD-L1 monoclonal antibody (IM-PROVE III, AB-729-203) prior to dosing any participants. This decision was based on a prioritization of resources and the projected availability of clinical data from this trial.
AB-101 (Oral PD-L1 Inhibitor)

AB-101-001 is a Phase 1a/1b double-blind, randomized, placebo-controlled clinical trial designed to investigate the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of single- and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV. Part 1 of the clinical trial has enrolled four sequential cohorts of eight healthy subjects each (6 active:2 placebo) to date, each receiving a single dose of AB-101 at increasing dose levels up to 25 mg or placebo. Data from Part 1 of this trial showed that AB-101 was generally well-tolerated with evidence of dose-dependent receptor occupancy. In the 25 mg cohort, all five evaluable subjects showed evidence of receptor occupancy between 50-100%. Arbutus has moved into Part 2 of this clinical trial which evaluates multiple-ascending doses of AB-101 in healthy subjects and expects to report preliminary data in the second half of this year.
Corporate Updates

The Company has made the decision to streamline the organization to focus its efforts on advancing the clinical development of imdusiran and AB-101, and is therefore ceasing all discovery efforts and discontinuing its IM-PROVE III clinical trial. In taking these steps to streamline the organization, Arbutus is implementing a reduction in its workforce of 40%, primarily affecting the discovery and general and administrative functions. As a result, Arbutus will incur a one-time restructuring charge of approximately $3.0 – $4.0 million that will be recorded in the third quarter of 2024. With these organizational changes and its ongoing cost management efforts, the Company now expects its current cash, cash equivalents and investments in marketable securities will be sufficient to fund operations into the fourth quarter of 2026.
LNP Litigation Update

Next steps in the lawsuit against Moderna include expert reports and expert depositions. A trial date has been set for April 21, 2025, and is subject to change.
The lawsuit against Pfizer/BioNTech is ongoing and a date for a claim construction hearing has not been set. 
Arbutus continues to protect and defend its intellectual property, which is the subject of the on-going lawsuits against Moderna and Pfizer/BioNTech. The Company is seeking fair compensation for Moderna’s and Pfizer/BioNTech’s use of its patented LNP technology that was developed with great effort and at a great expense, without which Moderna’s and Pfizer/BioNTech’s COVID-19 vaccines would not have been successful.

Financial Results

Cash, Cash Equivalents and Investments

As of June 30, 2024, the Company had cash, cash equivalents and investments in marketable securities of $148.5 million compared to $132.3 million as of December 31, 2023. During the six months ended June 30, 2024, the Company used $33.8 million in operating activities, which was offset by $44.1 million of net proceeds from the issuance of common shares under its "at-the-market" offering program (ATM Program). The Company expects its 2024 cash burn to range from $63 million to $67 million. With the organizational changes announced today, the Company believes its cash, cash equivalents and investments in marketable securities will be sufficient to fund its operations into the fourth quarter of 2026.

Revenue

Total revenue was $1.7 million for the three months ended June 30, 2024 compared to $4.7 million for the same period in 2023. The decrease of $3.0 million was due primarily to: i) a decrease in license revenue recognized under our licensing agreement with Qilu Pharmaceutical; and ii) a decrease in license royalty revenue from Alnylam due to lower sales of ONPATTRO in 2024 compared to 2023.

Operating Expenses

Research and development expenses were $15.6 million for the three months ended June 30, 2024 compared to $17.7 million for the same period in 2023. The decrease of $2.1 million was due primarily to the discontinuation of the Company’s coronavirus and AB-161 programs in September 2023 as part of its efforts to focus on its lead HBV product candidates, partially offset by an increase in clinical expenses for the Company’s AB-101 Phase 1a/1b clinical trial and its multiple imdusiran Phase 2a clinical trials. General and administrative expenses were $7.5 million for the three months ended June 30, 2024 compared to $6.0 million for the same period in 2023. The increase of $1.5 million was due primarily to higher litigation costs, partially offset by a decrease in compensation-related expenses.

Net Loss

For the three months ended June 30, 2024, the Company’s net loss was $19.8 million, or a loss of $0.11 per basic and diluted common share, as compared to a net loss of $17.1 million, or a loss of $0.10 per basic and diluted common share, for the three months ended June 30, 2023.

Outstanding Shares

As of June 30, 2024, the Company had approximately 188.7 million common shares issued and outstanding. In addition, the Company had approximately 20.5 million stock options and unvested restricted stock units outstanding as of June 30, 2024. Roivant Sciences Ltd. owned approximately 21% of our outstanding common shares as of June 30, 2024.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(in thousands, except share and per share data)

Three Months Ended March 31, Six Months Ended June 30,
2024 2023 2024 2023
Revenue
Collaborations and licenses $ 1,155 $ 3,885 $ 2,094 $ 9,394
Non-cash royalty revenue 571 766 1,164 1,944
Total revenue 1,726 4,651 3,258 11,338
Operating expenses
Research and development 15,551 17,692 30,954 35,967
General and administrative 7,547 5,980 12,859 11,532
Change in fair value of contingent consideration 211 (636 ) 391 (363 )
Total operating expenses 23,309 23,036 44,204 47,136
Loss from operations (21,583 ) (18,385 ) (40,946 ) (35,798 )
Other income
Interest income 1,829 1,461 3,374 2,729
Interest expense (34 ) (171 ) (78 ) (369 )
Foreign exchange gain (8 ) 1 (21 ) 5
Total other income 1,787 1,291 3,275 2,365
Net loss $ (19,796 ) $ (17,094 ) $ (37,671 ) $ (33,433 )
Loss per share
Basic and diluted $ (0.11 ) $ (0.10 ) $ (0.21 ) $ (0.20 )
Weighted average number of common shares
Basic and diluted 188,041,489 166,063,284 181,842,519 163,855,661

Comprehensive loss
Unrealized gain on available-for-sale securities 63 166 113 1,020
Comprehensive loss $ (19,733 ) $ (16,928 ) $ (37,558 ) $ (32,413 )

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

June 30, 2024 December 31, 2023
Cash, cash equivalents and marketable securities, current $ 141,986 $ 126,003
Accounts receivable and other current assets 6,234 6,024
Total current assets 148,220 132,027
Property and equipment, net of accumulated depreciation 4,059 4,674
Investments in marketable securities, non-current 6,527 6,284
Right of use asset 1,237 1,416
Total assets $ 160,043 $ 144,401
Accounts payable and accrued liabilities $ 11,108 $ 10,271
Deferred license revenue, current 11,034 11,791
Lease liability, current 453 425
Total current liabilities 22,595 22,487
Liability related to sale of future royalties 5,859 6,953
Contingent consideration 7,991 7,600
Lease liability, non-current 1,144 1,343
Total stockholders’ equity 122,454 106,018
Total liabilities and stockholders’ equity $ 160,043 $ 144,401

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Six Months Ended June 30,
2024
2023
Net loss $ (37,671 ) $ (33,433 )
Non-cash items 3,973 2,911
Change in deferred license revenue (757 ) (7,128 )
Other changes in working capital 656 (9,210 )
Net cash used in operating activities (33,799 ) (46,860 )
Net cash provided by investing activities 21,523 18,119
Issuance of common shares pursuant to the Open Market Sale Agreement 44,124 24,604
Cash provided by other financing activities 4,676 555
Net cash provided by financing activities 48,800 25,159
Effect of foreign exchange rate changes on cash and cash equivalents (21 ) 3
Increase/(decrease) in cash and cash equivalents 36,503 (3,579 )
Cash and cash equivalents, beginning of period 26,285 30,776
Cash and cash equivalents, end of period 62,788 27,197
Investments in marketable securities 85,725 136,344
Cash, cash equivalents and marketable securities, end of period $ 148,513 $ 163,541

Conference Call and Webcast Today

Arbutus will hold a conference call and webcast today, Thursday, August 1, 2024, at 8:45 AM Eastern Time to provide a corporate update. To dial-in for the conference call by phone, please register using the following link: Registration Link. A live webcast of the conference call can be accessed through the Investors section of Arbutus’ website at www.arbutusbio.com.

An archived webcast will be available on the Arbutus website after the event.

About Imdusiran (AB-729)

Imdusiran is an RNA interference (RNAi) therapeutic specifically designed to reduce all HBV viral proteins and antigens including hepatitis B surface antigen, which is thought to be a key prerequisite to enable reawakening of a patient’s immune system to respond to the virus. Imdusiran targets hepatocytes using Arbutus’ novel covalently conjugated N-Acetylgalactosamine (GalNAc) delivery technology enabling subcutaneous delivery. Clinical data generated thus far has shown single and multiple doses of imdusiran to be generally safe and well-tolerated, while also providing meaningful reductions in hepatitis B surface antigen and hepatitis B DNA. Imdusiran is currently in multiple Phase 2a clinical trials.  

About AB-101

AB-101 is our oral PD-L1 inhibitor candidate that we believe will allow for controlled checkpoint blockade while minimizing the systemic safety issues typically seen with checkpoint antibody therapies. Immune checkpoints such as PD-1/PD-L1 play an important role in the induction and maintenance of immune tolerance and in T-cell activation. Preclinical data generated thus far indicates that AB-101 mediates re-activation of exhausted HBV-specific T-cells from cHBV patients. We believe AB-101, when used in combination with other approved and investigational agents, could potentially lead to a functional cure in patients chronically infected with HBV. AB-101 is currently being evaluated in a Phase 1a/1b clinical trial.

About HBV

Hepatitis B is a potentially life-threatening liver infection caused by the hepatitis B virus (HBV). HBV can cause chronic infection which leads to a higher risk of death from cirrhosis and liver cancer. Chronic HBV infection represents a significant unmet medical need. The World Health Organization estimates that over 250 million people worldwide suffer from chronic HBV infection, while other estimates indicate that approximately 2.4 million people in the United States suffer from chronic HBV infection. Approximately 820,000 people die every year from complications related to chronic HBV infection despite the availability of effective vaccines and current treatment options.

On August 1, 2024 Agios Pharmaceuticals, Inc. (Nasdaq: AGIO), a leader in cellular metabolism and pyruvate kinase (PK) activation pioneering therapies for rare diseases, reported business highlights and financial results for the second quarter ended June 30, 2024 (Press release, Agios Pharmaceuticals, AUG 1, 2024, View Source [SID1234645245]).

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"Based on the positive data generated in the Phase 3 ENERGIZE and ENERGIZE-T studies, mitapivat is the first therapy to demonstrate efficacy in all subtypes of thalassemia, and we look forward to filing for FDA review by the end of the year," said Brian Goff, chief executive officer at Agios. "This morning, we were pleased to report topline data in the Phase 3 ACTIVATE-KidsT study of mitapivat, which is the first study to report safety and efficacy data in children with PK deficiency. We continue to make significant progress toward our vision of becoming a leading rare disease company with a potential multi-billion-dollar franchise in PK activation. Finally, we were pleased to bolster our cash position through a purchase agreement with Royalty Pharma for our vorasidenib royalty, with Agios now positioned to receive a total of $1.1 billion in payments upon FDA approval of vorasidenib."

Second Quarter 2024 and Recent Highlights

PYRUKYND Revenues: Generated $8.6 million in net revenue for the second quarter of 2024, a 5 percent sequential increase from the first quarter of 2024, primarily driven by increased patient demand. A total of 201 unique patients have completed prescription enrollment forms, representing an increase of 7 percent over the first quarter of 2024. A total of 128 patients are on PYRUKYND therapy, a 7 percent increase from the first quarter of 2024.
Thalassemia:
Met the primary and all key secondary endpoints in the Phase 3 ENERGIZE-T study of mitapivat in adults with transfusion-dependent alpha- or beta-thalassemia.
Presented positive results from the Phase 3 ENERGIZE study of mitapivat in adults with non-transfusion-dependent thalassemia in a plenary session at the European Hematology Association (EHA) (Free EHA Whitepaper) 2024 (EHA2024) Hybrid Congress.
Pediatric PK Deficiency:
Announced topline data from the Phase 3 ACTIVATE-KidsT study of mitapivat in children with PK deficiency who are regularly transfused. Agios plans to present a more detailed analyses of the results at an upcoming medical meeting.
Completed enrollment of the Phase 3 ACTIVATE-Kids study of mitapivat in children with PK deficiency who are not regularly transfused. Topline data from this study are expected in 2025.
Corporate Development:
Announced a $905 million purchase agreement with Royalty Pharma for Agios’ rights to its vorasidenib royalty. Under the agreement, Agios will receive a payment of $905 million upon approval of vorasidenib by the FDA and Royalty Pharma will receive the entirety of the 15% royalty on annual U.S. net sales of vorasidenib up to $1 billion, and a 12% royalty on annual U.S. net sales greater than $1 billion. Agios retains a 3% royalty on annual U.S. net sales greater than $1 billion. Agios retains rights to a $200 million milestone payment from Servier upon FDA approval of vorasidenib.
Entered into a distribution agreement with NewBridge Pharmaceuticals to advance commercialization of PYRUKYND in the Gulf Cooperation Council (GCC) region. NewBridge, a leading specialty company headquartered in Dubai, will commercialize PYRUKYND in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Key Upcoming Milestones & Priorities

Agios expects to execute on the following additional key milestones and priorities by the end of 2024:

Thalassemia: File sNDA for mitapivat in thalassemia based on the positive results from the Phase 3 ENERGIZE and ENERGIZE-T trials (year-end).
Sickle Cell Disease: Complete enrollment in the Phase 3 portion of the RISE UP study of mitapivat (year-end).
Lower-risk Myelodysplastic Syndromes: Dose first patient in Phase 2b study of tebapivat (AG-946) (mid-year).
Other: Potential approval of Servier’s vorasidenib for the treatment of IDH-mutant diffuse glioma. The FDA has assigned a PDUFA action date of August 20, 2024.
Second Quarter 2024 Financial Results

Revenue: Net product revenue from sales of PYRUKYND for the second quarter of 2024 was $8.6 million, compared to $6.7 million for the second quarter of 2023.

Cost of Sales: Cost of sales for the second quarter of 2024 was $1.5 million.

Research and Development (R&D) Expenses: R&D expenses were $77.4 million for the second quarter of 2024, compared to $68.9 million for the second quarter of 2023. The year-over-year increase was primarily attributable to an increase in costs associated with the in-licensed siRNA TMPRSS6 program for polycythemia vera.

Selling, General and Administrative (SG&A) Expenses: SG&A expenses were $35.5 million for the second quarter of 2024 compared to $30.4 million for the second quarter of 2023. The year-over-year increase was primarily attributable to an increase in commercial-related activities as we prepare for the potential approval of PYRUKYND in thalassemia.

Net Loss: Net loss was $96.1 million for the second quarter of 2024 compared to $83.8 million for the second quarter of 2023.

Cash Position and Guidance: Cash, cash equivalents and marketable securities as of June 30, 2024, were $645.3 million compared to $806.4 million as of December 31, 2023. Agios expects that its cash, cash equivalents and marketable securities together with anticipated product revenue, interest income and payments upon FDA approval of vorasidenib, will provide the financial independence to prepare for potential PYRUKYND launches in thalassemia and sickle cell disease, and to opportunistically expand our pipeline through both internally and externally discovered assets.

Conference Call Information

Agios will host a conference call and live webcast with slides today at 8:00 a.m. ET to discuss second quarter 2024 financial results and recent business highlights. The live webcast can be accessed under "Events & Presentations" in the Investors section of the company’s website at www.agios.com. The archived webcast will be available on the company’s website beginning approximately two hours after the event.

On July 31, 2024 Syndax Pharmaceuticals (Nasdaq: SNDX), a clinical stage biopharmaceutical company developing an innovative pipeline of cancer therapies, reported its financial results for the quarter ended June 30, 2024, and provided a business update (Press release, Syndax, AUG 1, 2024, View Source [SID1234645241]).

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"This is an exciting time for Syndax as we transition to a commercial stage company," said Michael A. Metzger, Chief Executive Officer. "We’ve made significant progress advancing our pipeline this quarter, including the presentation of updated revumenib combination data from the BEAT AML and AUGMENT-102 trials and additional axatilimab data from the AGAVE-201 trial at EHA (Free EHA Whitepaper). We are excited to continue building on this momentum as we look ahead to the approval of both first-in-class assets and sharing pivotal AUGMENT-101 data in mNPM1 AML this year."

Recent Pipeline Progress and Anticipated Milestones

Revumenib

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The New Drug Application (NDA) for revumenib, a highly selective menin inhibitor, for the treatment of adult and pediatric relapsed or refractory (R/R) KMT2A-rearranged (KMT2Ar) acute leukemia was granted Priority Review and is being reviewed under the U.S. FDA’s Real-Time Oncology Review (RTOR) Program. On July 29, 2024, the Company announced that the FDA extended the Prescription Drug User Fee Act (PDUFA) target action date for the revumenib NDA from September 26, 2024 to December 26, 2024 to provide FDA additional time to conduct a full review of supplemental information provided by the Company in response to the FDA’s requests.
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The Company expects to report topline data from the AUGMENT-101 pivotal trial cohort of patients with R/R mutant nucleophosmin (mNPM1) acute myeloid leukemia (AML) in the fourth quarter of 2024. Positive data could support a supplemental NDA (sNDA) filing for revumenib in R/R mNPM1 AML in the first half of 2025.
•
Multiple Phase 1 combination trials of revumenib in mNPM1 and KMT2Ar acute leukemias are ongoing across the treatment landscape. These trials include:

•
BEAT AML: Evaluating the combination of revumenib with venetoclax and azacitidine in front-line AML patients. This trial is being conducted as part of the Leukemia & Lymphoma Society’s Beat AML Master Clinical Trial. The Company presented updated positive data from the trial at the European Hematology Association (EHA) (Free EHA Whitepaper) 2024 Congress, showing a 96% (23 of 24 pts) composite complete remission (CRc) rate in patients with newly diagnosed mNPM1 or KMT2Ar AML. The BEAT AML trial is expanding to validate the recommended Phase 2 dose of the combination of revumenib with venetoclax and azacitidine.
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SAVE: Evaluating the all-oral combination of revumenib with venetoclax and decitabine/cedazuridine in R/R AML or mixed phenotype acute leukemias. The trial is being conducted by investigators from MD Anderson Cancer Center. The trial is expanding to validate the recommended Phase 2 doses, with additional data expected in the second half of 2024.
•
Intensive chemotherapy: Evaluating the combination of revumenib with intensive chemotherapy (7+3) followed by revumenib maintenance treatment in newly diagnosed patients with mNPM1 or KMT2Ar acute leukemias. The Phase 1 trial is designed to identify the recommended Phase 2 dose for this combination to support further development.

•
The Company plans to initiate a pivotal trial of revumenib in combination with venetoclax and azacitidine in newly diagnosed mNPM1 or KMT2Ar acute leukemia patients unfit to receive intensive chemotherapy by year-end 2024.
•
The Company presented updated data from the AUGMENT-102 trial evaluating the combination of revumenib with fludarabine and cytarabine in patients with R/R acute leukemias at the EHA (Free EHA Whitepaper) 2024 Congress. Treatment with the combination in R/R mNPM1, NUP98-rearranged (NUP98r) or KMT2Ar acute leukemia patients resulted in a 52% (14 of 27 pts) CRc rate.
•
The Company announced that it advanced into the Phase 1b portion of its Phase 1/2 proof-of-concept trial of revumenib in patients with R/R metastatic microsatellite stable (MSS) colorectal cancer (CRC) based on initial data from the Phase 1a portion of the trial.

Axatilimab

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The Biologics License Application (BLA) for axatilimab, an anti-CSF-1R antibody, for patients with chronic graft-versus-host disease (GVHD) after failure of at least two prior lines of systemic therapy, is under FDA Priority Review with a PDUFA action date of August 28, 2024.
•
Enrollment is ongoing in a 26-week randomized, double-blinded, placebo-controlled Phase 2 trial of axatilimab on top of standard of care in patients with idiopathic pulmonary fibrosis (IPF).

•
The Company’s partner, Incyte, plans to initiate two combination trials with axatilimab in earlier lines of treatment for chronic GVHD in the second half of 2024, including a Phase 2 combination trial with ruxolitinib and a Phase 3 combination trial with steroids.
•
The Company presented additional positive data from the AGAVE-201 pivotal trial evaluating axatilimab monotherapy in patients with refractory chronic GVHD at the EHA (Free EHA Whitepaper) 2024 Congress. Responses were noted in all fibrosis-dominant organs and the clinical activity was supported by clinician-reported and patient-reported changes in organ-specific symptoms, such as improvements in swallowing, shortness of breath, skin and joints, and sclerotic skin

Corporate Updates

•
In May 2024, the Companyannounced the appointment of Aleksandra Rizo, M.D., Ph.D to its Board of Directors. Dr. Rizo has extensive clinical development experience and a track record of successfully leading the development of several oncology drugs from discovery through commercialization.

Second Quarter 2024 Financial Results

As of June 30, 2024, Syndax had cash, cash equivalents, and short and long-term investments of $454.6 million and 85.3 million common shares and prefunded warrants outstanding.

Second quarter 2024 research and development expenses increased to $48.7 million from $34.8 million for the comparable prior year period. The increase was primarily due to greater clinical development expenses, higher pre-commercial manufacturing costs, and increased employee-related expenses and professional fees.

Second quarter 2024 selling, general and administrative expenses increased to $29.1 million from $14.9 million for the comparable prior year period. The increase was driven by a greater level of pre-commercialization activities for revumenib and axatilimab as well as higher employee-related expenses and professional fees.

For the three months ended June 30, 2024, Syndax reported a net loss attributable to common stockholders of $68.1 million, or $0.80 per share, compared to a net loss attributable to common stockholders of $44.6 million, or $0.64 per share, for the comparable prior year period.

Financial Guidance

For the third quarter of 2024, the Company expects research and development expenses to be $70 to $75 million and total operating expenses to be $105 to $110 million. For the full year of 2024, the Company continues to expect research and development expenses to be $240 to $260 million and total operating expenses to be $355 to $375 million, which includes milestone payments that the Company expects to become due as well as an estimated $43 million in non-cash stock compensation expense.

The Company continues to believe it has sufficient capital to fund its research, clinical development and commercial operations through 2026.

Conference Call and Webcast

In connection with the earnings release, Syndax’s management team will host a conference call and live audio webcast at 4:30 p.m. ET today, Thursday, August 1, 2024.

The live audio webcast and accompanying slides may be accessed through the Events & Presentations page in the Investors section of the Company’s website. Alternatively, the conference call may be accessed through the following:

Conference ID: Syndax2Q24
Domestic Dial-in Number: 800-590-8290
International Dial-in Number: 240-690-8800
Live webcast: https://www.veracast.com/webcasts/syndax/events/SNDX2Q24.cfm

For those unable to participate in the conference call or webcast, a replay will be available on the Investors section of the Company’s website at www.syndax.com approximately 24 hours after the conference call and will be available for 90 days following the call.

About Revumenib

Revumenib is a potent, selective, small molecule inhibitor of the menin-KMT2A binding interaction that is being developed for the treatment of KMT2Ar, also known as mixed lineage leukemia rearranged or MLLr, acute leukemias including acute lymphoid leukemia (ALL) and AML, and mNPM1 AML. Positive topline results from the Phase 2 AUGMENT-101 trial in R/R KMT2Ar acute leukemia showing the trial met its primary endpoint were presented at the 65th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, and data from the Phase 1 portion of AUGMENT-101 in acute leukemia was published in Nature. Revumenib was granted Orphan Drug Designation for the treatment of AML and ALL by the FDA and for the treatment of AML by the European Commission, and Fast Track designation by the FDA for the treatment of adult and pediatric patients with R/R acute leukemias harboring a KMT2A rearrangement or NPM1 mutation. Revumenib was granted Breakthrough Therapy Designation by the FDA for the treatment of adult and pediatric patients with R/R acute leukemia harboring a KMT2A rearrangement.

About Axatilimab

Axatilimab is an investigational monoclonal antibody that targets colony stimulating factor-1 receptor, or CSF-1R, a cell surface protein thought to control the survival and function of monocytes and macrophages. In pre-clinical models, inhibition of signaling through the CSF-1 receptor has been shown to reduce the number of disease-mediating macrophages along with their monocyte precursors, which has been shown to play a key role in the fibrotic disease process underlying diseases such as chronic GVHD and IPF. Positive topline results from the Phase 2 AGAVE-201 trial showing the trial met its primary endpoint were recently presented at the 65th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, and Phase 1/2 data of axatilimab in chronic GVHD were published in the Journal of Clinical Oncology. Axatilimab was granted Orphan Drug Designation by the U.S. Food and Drug Administration for the treatment of patients with chronic GVHD and IPF. In September 2021, Syndax and Incyte entered into an exclusive worldwide co-development and co-commercialization license agreement for axatilimab. Syndax has exercised its option under the collaboration agreement to co-commercialize axatilimab in the U.S. and will provide 30% of the commercial effort. Axatilimab is being developed under an exclusive worldwide license from UCB entered into between Syndax and UCB in 2016.

About the Real-Time Oncology Review Program (RTOR)

RTOR provides a more efficient review process for oncology drugs to ensure that safe and effective treatments are available to patients as early as possible, while improving review quality and engaging in early iterative communication with the applicant. Specifically, it allows for close engagement between the sponsor and the FDA throughout the submission process and it enables the FDA to review individual sections of modules of a drug application rather than requiring the submission of complete modules or a complete application prior to initiating review. Additional information about RTOR can be found at: View Source

On August 1, 2024 Precision BioSciences, Inc. (Nasdaq: DTIL), an advanced gene editing company utilizing its novel proprietary ARCUS platform to develop in vivo gene editing therapies for sophisticated gene edits, including gene elimination, gene insertion, and gene excision, reported financial results for the second quarter ended June 30, 2024 and provided a business update (Press release, Precision Biosciences, AUG 1, 2024, View Source [SID1234645240]).

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"During the first half of 2024 we have made excellent progress against our key priorities. We rapidly advanced PBGENE-HBV toward planned investigational new drug (IND) submission and/or clinical trial application (CTA) in 2024. We believe we are in a strong position to advance our first wholly owned in vivo gene editing program into the clinic. PBGENE-HBV is expected to be the first and only potentially curative gene editing program to enter the clinic that is specifically designed to provide a functional cure for chronic Hepatitis B by eliminating the root source of viral replication. I’m proud of our team’s operational progress this year, including nearing completion of final toxicology studies, production of final clinical trial material, onboarding global clinical study sites in multiple countries to conduct the Phase 1 trial, and adding world-class clinicians to our Hepatitis Scientific Advisory Board," said Michael Amoroso, President and Chief Executive Officer of Precision BioSciences.

"While advancing PBGENE-HBV as our first operational priority in 2024, we have also made steady progress on our second wholly owned program PBGENE-PMM for 3243 mutated (m.3243) mitochondrial disease, which is targeted for IND and/or CTA filing in 2025."

"As we enter the second half of the year, we are sufficiently capitalized based on our expected cash runway as a result of multiple business development deals combined with a $40 million equity raise to propel our two wholly owned programs to Phase 1 data readouts in 2025 and 2026," emphasized Mr. Amoroso.

Wholly Owned Portfolio

PBGENE-HBV (Viral Elimination Program): Precision is developing PBGENE-HBV for the treatment of patients with chronic Hepatitis B. Currently, it is estimated that approximately 300 million people worldwide are afflicted with chronic Hepatitis B. PBGENE-HBV is expected to be the first and only potentially curative gene editing program to enter the clinic that is specifically designed to eliminate cccDNA and inactivate integrated HBV DNA.

In June 2024, Precision participated in a panel discussion on the application of gene editing to the treatment of chronic Hepatitis B during the HBV Forum and presented new preclinical safety data for PBGENE-HBV at the European Association for the Study of the Liver. This data further supported the ability of PBGENE-HBV to specifically target and cut HBV DNA, leading to the elimination of cccDNA and integrated HBV DNA. The data also demonstrated a lack of detectable off-target editing for PBGENE-HBV at therapeutically relevant doses, including no editing-associated translocations in HBV infected primary human hepatocytes. Importantly, new non-human primate data showed that PBGENE-HBV was well-tolerated across multiple dose administrations. PBGENE-HBV is advancing through final toxicology studies and drug for the planned Phase 1 clinical trial has been manufactured. Precision expects to submit an IND and/or CTA for this program in 2024 and plans to provide an additional program update later this year.

PBGENE-PMM (Mutant Mitochondrial DNA Elimination Program): PBGENE-PMM is a first of its kind potential treatment for m.3243-mitochondrial disease designed to target mutant mitochondrial DNA while having no adverse impact on wild type (normal) mitochondrial DNA. Mitochondrial diseases are the most common hereditary metabolic disorder in the world. The m.3243 mitochondrial disease population that the program intends to address is large, affecting approximately 20,000 people in the US alone. The highly specific ARCUS nuclease is designed to shift heteroplasmy by editing and eliminating mutant mitochondrial DNA while allowing wild type mitochondrial DNA to repopulate in the mitochondria, thus improving cellular function. Unlike CRISPR/Cas, base editors, and prime editors, ARCUS single-component nucleases do not require a guide RNA and are therefore differentiated amongst gene editing modalities due to their ability to penetrate mitochondrial membranes.

In June 2024, Precision presented additional data from the PBGENE-PMM program at the United Mitochondrial Disease Foundation Mitochondrial Medicine 2024 Conference. The presentation highlighted the ability of PBGENE-PMM to localize exclusively to mitochondria, avoiding any detectable off-target editing in the nuclear genome, while generating substantial shifts in heteroplasmy and improvements in mitochondrial function. The Company anticipates filing an IND and/or CTA for this program in 2025.

Wholly Owned Portfolio – Under Assessment

In July 2024, Precision regained control of three programs developed under its collaboration with Prevail Therapeutics Inc. The Company has received inbound interest from potential partners regarding these programs and is in the process of conducting a portfolio assessment for these returned programs for internal development and/or development through new partners and expects to provide an update as decisions are finalized. These programs include:

PBGENE-DMD – novel gene excision approach for treatment of Duchenne Muscular Dystrophy utilizing a pair of ARCUS nucleases, delivered by a single adeno-associated virus (AAV), that are designed to excise an approximately 500,000 base pair mutation "hot spot" region from the dystrophin gene to restore a functionally competent variant of the native dystrophin protein. We believe this approach is unique when compared with microdystrophin treatment and is the first in class gene editing application for Duchenne Muscular Dystrophy.
PBGENE-LIVER – liver target for gene insertion with data demonstrating that ARCUS achieved 40% to 45% high efficiency and durable gene insertion at 1- and 3-months in nondividing cells in adult nonhuman primates (NHPs), the most challenging context for gene insertion. To our knowledge, ARCUS is the only gene editor presented at a conference showing high efficiency gene insertion in non-dividing cells in NHPs. This opens therapeutic application for both pediatric patients whose cells divide quickly, as well as adult patients whose cells divide much less frequently than pediatric patients.
PBGENE-CNS – gene editing program targeting neurons to address a disease of the central nervous system. Precision is the first to demonstrate successful in vivo editing of neurons in both mice and NHPs. This remains a very attractive program for Precision or for partners focused on neurodegenerative diseases.
Partnered Programs:

iECURE-OTC (Gene Insertion Program for OTC deficiency): Led by iECURE, ECUR-506 is the first ARCUS-mediated in vivo gene editing program to advance into the clinic following regulatory approvals in the US, the United Kingdom, and Australia for initiation of the OTC-HOPE study. The OTC-HOPE study is a first-in-human Phase 1/2 trial evaluating ECUR-506 as a potential treatment for neonatal onset ornithine transcarbamylase (OTC) deficiency and has begun recruiting patients at two sites in the United Kingdom. In May 2024, iECURE announced that it had received Fast Track designation from the FDA for ECUR-506 and expects initial data from this trial to be available in late 2024 or in 2025.

PBGENE-NVS (Gene Insertion Program for Sickle Cell Anemia and Beta Thalassemia): Precision continues to advance its gene editing program with Novartis to develop a custom ARCUS nuclease for patients with hemoglobinopathies, such as sickle cell disease and beta thalassemia. The collaborative intent is to insert, in vivo, a therapeutic transgene as a potential one-time transformative treatment. We believe this is the only in vivo approach in development that can be administered directly to the patient to overcome disparities in patient treatment access with other therapeutic technologies, including those that are targeting an ex vivo gene editing approach.

Corporate Updates

Expansion of Hepatitis Scientific Advisory Board to include world-class clinical investigators: In June 2024, Precision announced the appointment of Mark Sulkowski, M.D. and Jordan Feld, M.D., M.P.H. to its Hepatitis Scientific Advisory Board. They join inaugural member Raymond Schinazi, Ph.D., DSc, to provide counsel and deepen the Company’s scientific and clinical expertise ahead of Precision’s anticipated IND and/or CTA submission for PBGENE-HBV.

Addition to the Russell Microcap Index: As of the close of U.S. markets on June 28, 2024, Precision BioSciences was added to the Russell Microcap Index as part of the index’s annual reconstitution.

Common Stock purchase by members of management for $300,000: In May 2024, Precision entered into a definitive subscription agreement, pursuant to which the Company issued and sold in a non-brokered private placement to members of its senior leadership team, including the Chief Executive Officer, 25,000 shares of its common stock at a price of $12.00 per share, representing a 13.5% premium to the closing price of its common stock immediately preceding the signing of the subscription agreement, for an aggregate amount of $300,000.

Banc of California Loan and Security Agreement: On July 31, 2024, the Company entered into an amended and restated loan and security agreement (the 2024 Loan and Security Agreement) with Banc of California (formerly known as Pacific Western Bank) pursuant to which Banc of California provided the Company with a term loan with a principal amount of $22.5 million. The proceeds from the term loan were used to repay the $22.5 million outstanding principal balance under the prior revolving line of credit with Banc of California, and pursuant to the terms of the 2024 Loan and Security Agreement, the revolving line of credit was terminated. The maturity date under the 2024 Loan and Security Agreement is June 30, 2027. The term loan bears interest at an annual rate equal to the greater of (i) 1.50% below the Prime Rate then in effect or (ii) 4.50%.

Quarter Ended June 30, 2024 Financial Results:

Cash and Cash Equivalents: As of June 30, 2024, Precision had approximately $123.6 million in cash and cash equivalents. Existing cash and cash equivalents, upfront and potential near-term cash from CAR T transactions, along with expected operational receipts, continued fiscal and operating discipline, availability of Precision’s at-the-market (ATM) facility, and available credit are expected to extend Precision’s cash runway into the second half of 2026.

Revenues: Total revenues for the quarter ended June 30, 2024 were $49.9 million, as compared to $19.8 million for the same period in 2023. The increase of $30.1 million in revenue during the quarter ended June 30, 2024 was primarily the result of recognizing deferred revenue related to the termination of the amended and restated development and license agreement with Prevail Therapeutics.

Research and Development Expenses: Research and development expenses were $17.2 million for the quarter ended June 30, 2024, as compared to $13.1 million for the same period in 2023. The increase of $4.1 million was primarily due to an increase in external development costs for the PBGENE-HBV and PBGENE-PMM programs as they continue to advance towards the clinic.

General and Administrative Expenses: General and administrative expenses were $8.5 million for the quarter ended June 30, 2024, as compared to $9.8 million for the same period in 2023. The decrease of $1.3 million was primarily due to decreased employee and share-based compensation expense from a decrease in headcount.

Net Income from Continuing Operations: Net income from continuing operations was $32.7 million for the quarter ended June 30, 2024, inclusive of a $7.8 million non-cash gain on the fair value of our warrant liability which does not impact our cash runway, as compared to a net loss from continuing operations of $11.9 million, for the same period in 2023. The improvement was primarily related to recognition of deferred revenue from termination of the Prevail Agreement as well as the non-cash gain related to the fair value adjustments of our warrant liability.

Net Income: Net income was $32.7 million, or $4.70 per share (basic) and $4.67 per share (diluted), for the quarter ended June 30, 2024, as compared to a net loss of $11.9 million, or $(3.13) per share (basic and diluted), for the same period in 2023.

Shares: Basic and diluted weighted-average common shares outstanding for the second quarter of 2024 were 6,966,680 and 7,011,630, respectively, compared to 3,803,083 (basic and diluted) for the same period in 2023.