NEWARK, Calif., Jan. 31, 2024 (GLOBE NEWSWIRE) -- CymaBay Therapeutics, Inc. (NASDAQ:CBAY), a biopharmaceutical company focused on innovative therapies for patients with liver and other chronic diseases, today announced that members of its management team will participate in the Guggenheim Healthcare Talks 6th Annual Biotechnology Conference, February 7-8, in New York, NY, Raymond James & Associates' 45th Annual Institutional Investors Conference, March 4-6, in Orlando, Florida, and Leerink Partners Global ...

NEWARK, Calif., Jan. 16, 2024 (GLOBE NEWSWIRE) -- CymaBay Therapeutics, Inc. (NASDAQ:CBAY), a clinical-stage biopharmaceutical company focused on developing therapies for liver and other chronic diseases with high unmet need, today announced the grant of inducement awards to two employees on January 12, 2024 (the "Grant Date") in connection with the employees' commencement of employment at CymaBay. The Compensation Committee of the Board of Directors of CymBay approved the grant of non-qualified stock optio ...

Company Participants Paul Quinlan - General Counsel Chuck McWherter - Chief Scientific Officer & President of R&D Harish Shantharam - Chief Financial Officer Steven Seedhouse - Raymond James Cory Jubinville - LifeSci Capital Andy Hsieh - William Blair Operator Now, I would like to turn the call over to Mr. Paul Quinlan, General Counsel at CymaBay. Mr. Quinlan, please proceed. Thank you, operator and good afternoon everyone. I hope that you have had a chance to review the press release we issued announcing o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO (510) 293-8800 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Indicate by check ...

Financial Data and Key Metrics Changes - The company reported a strong balance sheet with cash, cash equivalents, and investments totaling $213.8 million as of June 30, 2023, which is sufficient to fund operations through the third quarter of 2024 [50][52]. - The net loss for the quarter ended June 30, 2023, was lower than the corresponding period in 2022, primarily due to higher collaboration revenue, partially offset by an increase in operating expenses [87]. Business Line Data and Key Metrics Changes - Collaboration revenue of $31 million was recognized in Q2 2023 following the completion of the initial technology transfer to Kaken for the development and commercialization of seladelpar in Japan [63]. - Research and development expenses for Q2 2023 were $19.5 million, up from $17.9 million in the same period in 2022, driven by higher personnel costs to support clinical studies and regulatory activities [63][86]. Market Data and Key Metrics Changes - The company estimates that in the U.S., over 20,000 patients on UDCA may have persistent ALP levels between 1 and 1.67 times the upper limit of normal, indicating a significant market opportunity for seladelpar [47][60]. - Less than 40% of UDCA-treated patients achieve a complete response, suggesting a substantial unmet need in the market [49]. Company Strategy and Development Direction - The company is focused on advancing seladelpar as a second-line treatment for patients with primary biliary cholangitis (PBC) and is preparing for regulatory submissions following the anticipated top-line results from the RESPONSE study by the end of September [37][56]. - The IDEAL study has been initiated to evaluate the effects of seladelpar on patients with persistent elevations of ALP, which could reset treatment expectations for this neglected population [39][40]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming top-line results from the RESPONSE study and emphasized the importance of quality and data integrity in the final stages of the study [95][115]. - The management team highlighted the significant unmet need in addressing pruritus in PBC patients and the potential for seladelpar to improve quality of life [102][115]. Other Important Information - The company has made significant progress in building its commercial infrastructure and has recruited key senior leaders in marketing and market access [83][84]. - The ASSURE study, currently active in over 25 countries, has more than 300 patients taking seladelpar, contributing to both safety and efficacy data sets for regulatory filings [44][45]. Q&A Session Summary Question: What is the timing for the IDEAL study and its significance? - Management highlighted that the timing of the IDEAL study is based on extensive planning and market research, aiming to gather critical data for a population at higher risk of disease progression [68][69]. Question: What percentage of the current PBC market falls under the IDEAL population? - Early market research suggests that nearly a third of patients on UDCA could fall into the IDEAL population, indicating a significant market opportunity [92]. Question: Can you discuss the rate of normalization seen with seladelpar in previous trials? - The company expects to see continued reductions in ALP levels, potentially normalizing levels in patients with ALP between 1 and 1.67 times the upper limit of normal based on previous trial data [125][126].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) CymaBay Therapeutics, Inc.'s unaudited condensed consolidated financial statements and notes are presented for periods ended June 30, 2023, and December 31, 2022 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :----- | :--------------------------- | :------------------------------- | | Cash and cash equivalents | $35,482 | $20,291 | | Marketable securities | $178,362 | $115,194 | | Total current assets | $224,071 | $138,073 | | Total assets | $226,650 | $141,852 | | Total current liabilities | $17,894 | $15,441 | | Development financing liability | $99,248 | $90,227 | | Total liabilities | $118,242 | $105,698 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) | Metric | 3 Months Ended June 30, 2023 (in thousands) | 3 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2023 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | | :----- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Collaboration revenue | $31,016 | $0 | $31,016 | $0 | | Research and development expenses | $19,537 | $17,891 | $38,088 | $36,306 | | General and administrative expenses | $11,578 | $5,878 | $19,902 | $11,965 | | Total operating expenses | $31,115 | $23,769 | $57,990 | $48,271 | | Loss from operations | $(99) | $(23,769) | $(26,974) | $(48,271) | | Net loss | $(808) | $(27,094) | $(29,586) | $(54,863) | | Basic and diluted net loss per common share | $(0.01) | $(0.31) | $(0.30) | $(0.62) | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(19,006) | $(47,802) | | Net cash used in investing activities | $(59,923) | $(49,792) | | Net cash provided by financing activities | $94,120 | $24,541 | | Net increase (decrease) in cash and cash equivalents | $15,191 | $(73,053) | | Cash and cash equivalents at end of period | $35,482 | $52,753 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | Balances as of Dec 31, 2022 (in thousands) | Balances as of June 30, 2023 (in thousands) | | :----- | :----------------------------------------- | :------------------------------------------ | | Common Shares | 84,681,063 | 97,804,712 | | Stock Amount | $8 | $17 | | Additional Paid-in Capital | $909,329 | $1,010,958 | | Accumulated Comprehensive Other Loss | $(326) | $(124) | | Accumulated Deficit | $(872,857) | $(902,443) | | Total Stockholders' Equity | $36,154 | $108,408 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Organization and Description of Business](index=7&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) - CymaBay is a clinical-stage biopharmaceutical company focused on developing innovative therapies for patients with liver and other chronic diseases, with seladelpar for primary biliary cholangitis (PBC) as its key clinical development candidate[24](index=24&type=chunk) - The company has incurred net operating losses and negative cash flows from operations since its inception, with an accumulated deficit of **$902.4 million** as of June 30, 2023[25](index=25&type=chunk) - As of June 30, 2023, the company had cash, cash equivalents, and marketable securities totaling **$213.8 million**, which is believed to be sufficient to fund its current operating plan for at least twelve months[27](index=27&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=8&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) [Basis of Presentation and Use of Estimates](index=8&type=section&id=Basis%20of%20Presentation%20and%20Use%20of%20Estimates) - The unaudited interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP, requiring management to make informed estimates and assumptions[29](index=29&type=chunk)[31](index=31&type=chunk) [Revenue Recognition](index=10&type=section&id=Revenue%20Recognition) - The company applies a five-step model to recognize revenue from contracts with customers, including collaboration agreements, when control of promised goods or services is transferred[32](index=32&type=chunk) - Upfront license fees are recognized as revenue when the license is effective and the underlying intellectual property is made available to the collaborator[44](index=44&type=chunk) - Sales-based milestone and royalty payments are recognized upon the later of achievement of underlying sales or satisfaction of related performance obligations[45](index=45&type=chunk) [Fair Value of Financial Instruments](index=11&type=section&id=Fair%20Value%20of%20Financial%20Instruments) - Fair value is defined as an exit price in an orderly transaction, and assets/liabilities are reported using a three-level fair value hierarchy[39](index=39&type=chunk) - Cash equivalents are classified as Level 1, and marketable securities (money market funds, corporate debt, commercial paper, U.S. treasury, U.S. agency, supranational debt) are primarily Level 2[47](index=47&type=chunk)[48](index=48&type=chunk) - The development financing liability is classified as Level 3, with its valuation based on a discounted cash flow model using unobservable inputs[48](index=48&type=chunk) [Cash, Cash Equivalents, and Marketable Securities](index=13&type=section&id=Cash,%20Cash%20Equivalents,%20and%20Marketable%20Securities) - Cash equivalents include highly liquid investments with an original maturity of 90 days or less[49](index=49&type=chunk) - Marketable securities are classified as 'available-for-sale' and consist of corporate debt, commercial paper, U.S. agency, U.S. treasury, and supranational debt securities[50](index=50&type=chunk) - Unrealized holding gains and losses on available-for-sale marketable securities are reported in accumulated other comprehensive loss[51](index=51&type=chunk) | Category | Amortized Cost (June 30, 2023, in thousands) | Fair Value (June 30, 2023, in thousands) | | :------- | :------------------------------------------- | :--------------------------------------- | | Money market funds | $28,261 | $28,261 | | Current marketable securities | $178,486 | $178,362 | | Total marketable securities | $206,747 | $206,623 | [Concentration of Risk](index=15&type=section&id=Concentration%20of%20Risk) - The company is exposed to credit risk from financial institutions holding its cash, cash equivalents, and investments, and from issuers of investments[57](index=57&type=chunk) - Reliance on single suppliers for certain materials and key components poses a risk of significant delays if supply is interrupted, as new supplier qualification is time-consuming[58](index=58&type=chunk) [Research and Development Expenses](index=15&type=section&id=Research%20and%20Development%20Expenses) - Research and development expenses, including costs for personnel, CROs, clinical trials, manufacturing, and non-clinical studies, are expensed as incurred[59](index=59&type=chunk) - Expenses related to clinical studies and manufacturing development activities are recorded based on estimates of services received, with adjustments made if actual timing or effort varies[60](index=60&type=chunk) [Development Financing Agreement (Accounting Policy)](index=15&type=section&id=Development%20Financing%20Agreement%20(Accounting%20Policy)) - The Development Financing Agreement is accounted for as a debt instrument, with payments received recorded as a development financing liability at amortized cost[61](index=61&type=chunk) - The liability is accreted to contractual success fee amounts based on estimated timing of regulatory approval and sales milestones, using an imputed interest rate[61](index=61&type=chunk)[63](index=63&type=chunk) - Contingent repayment features are identified as embedded derivative liabilities and assessed for materiality at each reporting date[64](index=64&type=chunk) [Stock-Based Compensation (Accounting Policy)](index=16&type=section&id=Stock-Based%20Compensation%20(Accounting%20Policy)) - Stock-based compensation is measured at fair value on the grant date and recognized as expense on a straight-line basis over the vesting period[65](index=65&type=chunk) - The Black-Scholes option pricing model is used to determine the fair value of stock option awards, requiring subjective assumptions[65](index=65&type=chunk) [Recently Issued Accounting Pronouncements (ASU 2016-13)](index=16&type=section&id=Recently%20Issued%20Accounting%20Pronouncements%20(ASU%202016-13)) - The company adopted ASU No. 2016-13, which modifies credit loss measurement, on January 1, 2023, with no material impact on its condensed consolidated financial statements[66](index=66&type=chunk) [Note 3. Other Accrued Liabilities](index=17&type=section&id=Note%203.%20Other%20Accrued%20Liabilities) | Category | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------- | :--------------------------- | :------------------------------- | | Accrued compensation | $3,549 | $5,779 | | Accrued professional fees and other | $2,912 | $1,372 | | Current portion of operating lease liability | $374 | $664 | | Total other accrued liabilities | $6,835 | $7,815 | [Note 4. Collaboration and License Agreement](index=17&type=section&id=Note%204.%20Collaboration%20and%20License%20Agreement) - On January 6, 2023, CymaBay entered into an exclusive Collaboration and License Agreement with Kaken Pharmaceuticals Co., Ltd. for seladelpar in Japan[68](index=68&type=chunk) - Kaken made an upfront cash payment of **¥4.5 billion** (approximately **$34.2 million**) in January 2023 and is obligated to pay potential milestone payments totaling up to **¥17.0 billion** (approximately **$128.0 million**)[73](index=73&type=chunk) - **$31.0 million** of the upfront fee was recognized as collaboration revenue upon completion of the initial technology transfer; the remaining **$2.7 million** is deferred for ongoing clinical data delivery and CMC development[83](index=83&type=chunk) [Note 5. Development Financing Agreement](index=18&type=section&id=Note%205.%20Development%20Financing%20Agreement) - On July 30, 2021, the company entered into a Development Financing Agreement with Abingworth LLP, providing **$75.0 million** in base funding to support seladelpar development for PBC[84](index=84&type=chunk) - The agreement includes fixed success payments (2.0x funding) upon regulatory approval and variable success payments (1.1x funding) upon sales milestones, with total payment obligations capped at **3.1x** the funding provided[78](index=78&type=chunk)[84](index=84&type=chunk) - As of June 30, 2023, the development financing liability was classified as a long-term liability, with an imputed interest rate of approximately **19.2%**[82](index=82&type=chunk) [Note 6. Stockholders' Equity](index=19&type=section&id=Note%206.%20Stockholders'%20Equity) - The company is authorized to issue **10,000,000 shares** of preferred stock and **200,000,000 shares** of common stock[91](index=91&type=chunk) - In January 2023, the company issued **11,821,428 shares** of common stock and a pre-funded warrant for **2,142,857 shares**, generating aggregate net proceeds of **$92.4 million**[92](index=92&type=chunk) - As of June 30, 2023, pre-funded warrants to purchase **4,642,857 shares** of common stock were outstanding[95](index=95&type=chunk) - In March 2023, the company established an At-the-Market (ATM) facility to sell up to **$100.0 million** of common stock, with no shares sold to date[96](index=96&type=chunk) [Note 7. Net Loss Per Common Share](index=20&type=section&id=Note%207.%20Net%20Loss%20Per%20Common%20Share) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :----- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss per share | $(0.01) | $(0.31) | $(0.30) | $(0.62) | | Weighted average common shares outstanding | 97,507,533 | 84,677,939 | 95,614,901 | 84,677,939 | | Pre-funded warrants outstanding | 4,642,857 | 3,125,000 | 4,457,380 | 3,125,000 | - Outstanding stock options were excluded from the calculation of net loss per share in all periods presented because their effect would be antidilutive[99](index=99&type=chunk) [Note 8. Stock Plans and Stock-Based Compensation](index=21&type=section&id=Note%208.%20Stock%20Plans%20and%20Stock-Based%20Compensation) - In June 2023, stockholders approved the 2023 Equity Incentive Plan, authorizing the issuance of up to **25,883,628 shares** for various equity awards[100](index=100&type=chunk)[104](index=104&type=chunk) - As of June 30, 2023, there were **9,053,849 common stock shares** available for future grants under the 2023 Plan[105](index=105&type=chunk) | Category | 3 Months Ended June 30, 2023 (in thousands) | 3 Months Ended June 30, 2022 (in thousands) | 6 Months Ended June 30, 2023 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | | :------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Research and development | $1,347 | $1,070 | $2,948 | $2,168 | | General and administrative | $2,003 | $1,322 | $3,889 | $2,638 | | Total stock-based compensation expense | $3,350 | $2,392 | $6,837 | $4,806 | [Note 9. Subsequent Event](index=22&type=section&id=Note%209.%20Subsequent%20Event) - In July 2023, the Board approved an amendment to the 2020 New Hire Plan to increase the number of shares available for grant by **1,000,000 shares** of common stock[107](index=107&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses CymaBay's financial condition, results of operations, and liquidity, focusing on seladelpar's progress and financial performance for the three and six months ended June 30, 2023 [Overview](index=23&type=section&id=Overview) - CymaBay Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing innovative therapies for liver and other chronic diseases, with seladelpar as its lead product candidate for primary biliary cholangitis (PBC)[110](index=110&type=chunk)[111](index=111&type=chunk) - Enrollment for RESPONSE, a Phase 3 registration study for seladelpar in PBC, was completed in July 2022, with top-line data expected in the third quarter of 2023[112](index=112&type=chunk) - The ASSURE trial, an open-label, long-term safety and efficacy study for seladelpar, currently has over 300 patients enrolled[117](index=117&type=chunk) - MBX-2982, targeting GPR119 for type 1 diabetes, is in a fully enrolled Phase 2a proof-of-pharmacology study, with CymaBay retaining full commercial rights[118](index=118&type=chunk) [Critical Accounting Policies and Estimates](index=24&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no changes to critical accounting policies since the Annual Report on Form 10-K for December 31, 2022, except for the revenue recognition policy related to the Kaken license agreement[121](index=121&type=chunk) [Recent Accounting Pronouncements](index=24&type=section&id=Recent%20Accounting%20Pronouncements%20(MD%26A)) - Refer to Note 2—Summary of Significant Accounting Policies for a discussion of recent accounting pronouncements[122](index=122&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) - The company has not generated income from operations and had an accumulated deficit of **$902.4 million** as of June 30, 2023, primarily due to research and development, general and administrative, and net interest expenses[116](index=116&type=chunk) - Substantial operating losses are expected to continue, requiring future financing through collaborations, equity offerings, or debt financings[116](index=116&type=chunk) [Collaboration Revenue](index=25&type=section&id=Collaboration%20Revenue%20(MD%26A)) - The company recognized **$31.0 million** as collaboration revenue during the three and six months ended June 30, 2023, from the Kaken license agreement[126](index=126&type=chunk) - This revenue relates to the license transfer and delivery of underlying technology and know-how; the remaining **$2.7 million** of the upfront consideration was deferred[126](index=126&type=chunk) [Research & Development Expenses](index=25&type=section&id=Research%20%26%20Development%20Expenses%20(MD%26A)) | Metric | 3 Months Ended June 30, 2023 (in thousands) | 3 Months Ended June 30, 2022 (in thousands) | Change Q2 vs. 2022 (in thousands) | 6 Months Ended June 30, 2023 (in thousands) | 6 Months Ended June 30, 2022 (in thousands) | Change YTD vs. 2022 (in thousands) | | :----- | :------------------------------------------ | :------------------------------------------ | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :--------------------------------- | | Total project costs | $10,615 | $11,733 | $(1,118) | $19,951 | $23,362 | $(3,411) | | Internal research and development costs | $8,922 | $6,158 | $2,764 | $18,137 | $12,944 | $5,193 | | Total research and development | $19,537 | $17,891 | $1,646 | $38,088 | $36,306 | $1,782 | - The increase in R&D expenses was primarily due to higher employee compensation and external contractor expenses to support clinical studies and potential regulatory submissions[130](index=130&type=chunk)[131](index=131&type=chunk) - Total project costs decreased due to the completion of enrollment in the RESPONSE trial and lower spending in drug manufacturing and development for PBC[130](index=130&type=chunk)[131](index=131&type=chunk) [General and Administrative Expenses](index=26&type=section&id=General%20and%20Administrative%20Expenses%20(MD%26A)) - General and administrative expenses increased by **$5.7 million** to **$11.6 million** for the three months and **$7.9 million** to **$19.9 million** for the six months ended June 30, 2023, compared to 2022[133](index=133&type=chunk)[134](index=134&type=chunk) - This increase was driven by higher headcount in general and administrative personnel and increased professional services to support drug development activities and prepare for potential commercialization of seladelpar in PBC[133](index=133&type=chunk)[134](index=134&type=chunk) [Other Income (Expense), Net](index=27&type=section&id=Other%20Income%20(Expense),%20Net%20(MD%26A)) - Interest expense increased by **$1.0 million** (QoQ) and **$2.0 million** (YoY) primarily due to the accretion of the Abingworth Development Financing Arrangement liability[135](index=135&type=chunk) - Interest income increased significantly by **$2.3 million** (QoQ) and **$4.2 million** (YoY) due to higher prevailing interest rates and an increase in the marketable securities portfolio[135](index=135&type=chunk) - Other income increased by **$1.3 million** due to the recognition of refundable Employee Retention Tax Credits for 2020 and 2021[135](index=135&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) - At June 30, 2023, cash, cash equivalents, and marketable securities totaled **$213.8 million**, up from **$135.5 million** at December 31, 2022[136](index=136&type=chunk) - Net cash used in operating activities for the six months ended June 30, 2023, decreased by **$28.8 million** to **$19.0 million**, primarily due to the recognition of **$31.0 million** in collaboration revenue[145](index=145&type=chunk) [Development Financing](index=27&type=section&id=Development%20Financing%20(MD%26A)) - The company received **$75.0 million** in funding from Abingworth LLP under the Development Financing Agreement to support seladelpar development for PBC, with tranches received in August 2021, November 2021, and January 2022[137](index=137&type=chunk) [Collaboration and License Agreement](index=27&type=section&id=Collaboration%20and%20License%20Agreement%20(MD%26A)) - The January 2023 license agreement with Kaken includes a **$34.2 million** upfront payment and potential future milestone payments up to **¥17.0 billion**[138](index=138&type=chunk) - CymaBay is responsible for manufacturing and supplying seladelpar to Kaken and delivering clinical trial data, nonclinical studies data, and CMC data[138](index=138&type=chunk) [Sale of Common Stock and Pre-funded Warrant](index=28&type=section&id=Sale%20of%20Common%20Stock%20and%20Pre-funded%20Warrant%20(MD%26A)) - The January 2023 public equity offering generated **$92.4 million** in net proceeds from the sale of common stock and pre-funded warrants[143](index=143&type=chunk) - Proceeds are anticipated to fund ongoing development of seladelpar, working capital, and general corporate purposes[143](index=143&type=chunk) [At-the-Market (ATM) Facility](index=28&type=section&id=At-the-Market%20(ATM)%20Facility%20(MD%26A)) - In March 2023, the company filed for an At-the-Market (ATM) facility to sell up to **$100.0 million** of common stock, with no shares sold to date[144](index=144&type=chunk) [Cash Flows](index=28&type=section&id=Cash%20Flows%20(MD%26A)) | Metric | Six Months Ended June 30, 2023 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(19,006) | $(47,802) | | Net cash used in investing activities | $(59,923) | $(49,792) | | Net cash provided by financing activities | $94,120 | $24,541 | | Net increase (decrease) in cash and cash equivalents | $15,191 | $(73,053) | - Net cash used in operating activities decreased by **$28.8 million** due to lower net loss from collaboration revenue, partially offset by increased operating expenses[145](index=145&type=chunk) - Net cash provided by financing activities was **$94.1 million**, primarily from the January 2023 public equity offering[146](index=146&type=chunk) [Capital Requirements](index=29&type=section&id=Capital%20Requirements%20(MD%26A)) - The company expects increased research and development and overall operating expenses due to late-stage product development and commercialization planning for seladelpar[147](index=147&type=chunk) - Additional financing will be required through equity, debt, or collaborative arrangements to fund operations and obligations under the Abingworth Financing Agreement[147](index=147&type=chunk) - As of June 30, 2023, cash, cash equivalents, and marketable securities of approximately **$213.8 million** are believed to be sufficient to fund the current operating plan through the third quarter of 2024[151](index=151&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) - This item is not applicable to Smaller Reporting Companies[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) [Evaluation of Disclosure Controls and Procedures](index=29&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, including the President and CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2023[149](index=149&type=chunk) [Limitations on the Effectiveness of Controls](index=29&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Controls) - Control systems provide only reasonable, not absolute, assurance that objectives are met, and inherent limitations mean not all control issues may be detected[152](index=152&type=chunk) [Changes in Internal Controls](index=29&type=section&id=Changes%20in%20Internal%20Controls) - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2023[153](index=153&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) CymaBay is not currently involved in legal proceedings expected to materially affect its financial condition, operations, or cash flows - The company is not currently involved in any legal proceedings expected to have a material adverse effect on its results of operations, financial condition, or cash flows[154](index=154&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks to CymaBay's business, covering financial condition, clinical development, third-party reliance, commercialization, intellectual property, COVID-19, and operational factors [RISK FACTOR SUMMARY](index=30&type=section&id=RISK%20FACTOR%20SUMMARY) - The summary highlights significant risks related to financial condition, capital requirements, clinical development, regulatory approval, reliance on third parties, commercialization, intellectual property, COVID-19, employees, information technology, and common stock ownership[157](index=157&type=chunk)[158](index=158&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Risks Related to Our Financial Condition and Capital Requirements](index=30&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Capital%20Requirements) - The company has incurred significant net losses since inception and anticipates continued losses, requiring additional equity and/or debt capital to fund operations and product development[158](index=158&type=chunk)[167](index=167&type=chunk) - Failure to comply with obligations under the Development Financing Agreement with Abingworth could lead to acceleration of potentially significant payments, such as **310%** of funding for a Fundamental Breach[158](index=158&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - The ability to generate future revenues from product sales is uncertain and depends on successfully developing, obtaining regulatory approval for, and commercializing product candidates[158](index=158&type=chunk)[180](index=180&type=chunk) - Raising additional capital may cause dilution to existing stockholders, restrict operations, or require relinquishing rights to technologies or product candidates[158](index=158&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - Adverse developments in the financial services industry, such as the Silicon Valley Bank closure, could adversely affect the company's ability to access funds[187](index=187&type=chunk) [Risks Related to Clinical Development and Regulatory Approval](index=31&type=section&id=Risks%20Related%20to%20Clinical%20Development%20and%20Regulatory%20Approval) - Drug development and obtaining regulatory approval are costly, time-consuming, and highly uncertain processes[160](index=160&type=chunk)[174](index=174&type=chunk) - Clinical testing is expensive, difficult, and uncertain; negative or inconclusive results could require additional studies or abandonment of product development programs[190](index=190&type=chunk)[193](index=193&type=chunk) - Unforeseen events during clinical trials, such as enrollment issues, protocol amendments, or safety concerns, could delay or prevent their commencement and/or completion[191](index=191&type=chunk) - Geopolitical turmoil between Russia and Ukraine has led to the suspension or wind-down of clinical trial activity in those regions, potentially complicating data analysis[194](index=194&type=chunk) - Product candidates may cause adverse effects or have other properties that could delay or prevent regulatory approval or limit the scope of any approved label or market acceptance[198](index=198&type=chunk)[199](index=199&type=chunk) - Relationships with health care professionals, customers, and payors are subject to anti-kickback, fraud, and abuse laws, with potential for significant penalties for non-compliance[205](index=205&type=chunk)[278](index=278&type=chunk) - Current laws and future legislation, such as the PPACA and Inflation Reduction Act, may increase the difficulty and cost of obtaining marketing approval and affect product pricing[206](index=206&type=chunk)[280](index=280&type=chunk) [Risks Related to Our Reliance on Third Parties](index=31&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) - The company relies on third-party manufacturers for preclinical, clinical, and commercial drug supplies, which entails risks such as manufacturing challenges, impurities, and delays[161](index=161&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - Disruptions in the supply chain from limited sources of supply for product candidates could cause significant delays in development and commercialization[285](index=285&type=chunk) - Reliance on contract service providers (CSPs) to conduct, supervise, and monitor clinical studies means limited influence over their performance, and non-compliance could deem clinical data unreliable[255](index=255&type=chunk)[256](index=256&type=chunk) [Risks Related to Commercialization of Our Product Candidates](index=31&type=section&id=Risks%20Related%20to%20Commercialization%20of%20Our%20Product%20Candidates) - Commercial success depends on market acceptance by the medical community, including physicians, patients, and health care payors, which is uncertain[162](index=162&type=chunk)[259](index=259&type=chunk) - The company lacks internal sales and marketing capabilities and must build them or enter into agreements with third parties, which is expensive and risky[162](index=162&type=chunk)[261](index=261&type=chunk)[263](index=263&type=chunk) - Significant competition from companies with greater financial, manufacturing, marketing, and drug development resources could negatively impact commercial opportunities[162](index=162&type=chunk)[209](index=209&type=chunk)[267](index=267&type=chunk) - Commercialization outside the United States introduces additional risks, including differing regulatory requirements, reduced intellectual property protection, economic instability, and foreign currency fluctuations[265](index=265&type=chunk) - Product liability lawsuits are an inherent risk, potentially leading to substantial liabilities, decreased demand, impairment to business reputation, and inability to commercialize products[300](index=300&type=chunk)[301](index=301&type=chunk) - Limited resources may be expended on a particular product candidate or indication, potentially foregoing more profitable opportunities or those with a greater likelihood of success[302](index=302&type=chunk)[303](index=303&type=chunk) [Risks Related to Our Intellectual Property](index=31&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - The company relies on patents, trade secret protection, and confidentiality agreements, but these may be insufficient to protect its intellectual property[163](index=163&type=chunk)[212](index=212&type=chunk)[226](index=226&type=chunk) - Patent applications may fail to result in issued patents, or issued patents may be challenged, narrowed, or infringed by third parties, potentially leading to costly litigation[212](index=212&type=chunk)[214](index=214&type=chunk)[217](index=217&type=chunk)[220](index=220&type=chunk) - Laws in some foreign countries may not protect patents and other proprietary rights to the same extent or in the same manner as the laws of the United States[215](index=215&type=chunk) - The loss of key license rights, such as the exclusive license from Janssen Pharmaceutica NV for seladelpar, could have a materially adverse effect on the business[219](index=219&type=chunk)[230](index=230&type=chunk) [Risks Related to COVID-19](index=31&type=section&id=Risks%20Related%20to%20COVID-19) - The COVID-19 situation may adversely affect the business, including the ability to enroll and conduct critical clinical trials, and impact other development efforts and third-party service providers[114](index=114&type=chunk)[119](index=119&type=chunk)[164](index=164&type=chunk) [Other Risks Factors – Risks Related to Employees, Information Technology, and Owning Our Common Stock](index=31&type=section&id=Other%20Risks%20Factors%20%E2%80%93%20Risks%20Related%20to%20Employees,%20Information%20Technology,%20and%20Owning%20Our%20Common%20Stock) - The company's future success depends on its ability to retain key executives and to attract, retain, and motivate qualified personnel, facing intense competition for skilled employees[165](index=165&type=chunk)[237](index=237&type=chunk) - Expanding the organization to build clinical and drug development operations may lead to difficulties in managing growth, potentially disrupting operations[239](index=239&type=chunk) - Significant disruptions of information technology systems or breaches of data security could materially adversely affect the business, results of operations, and financial condition[165](index=165&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) - Changes in and failures to comply with United States and foreign privacy and data protection laws (e.g., HIPAA, GDPR) may adversely affect business, operations, and financial performance due to complexity and high compliance costs[165](index=165&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) - The company's stock price is volatile, and future sales and issuances of common stock or rights to purchase common stock could result in additional dilution of existing stockholders' ownership[165](index=165&type=chunk)[249](index=249&type=chunk)[251](index=251&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could make an acquisition of the company more difficult and may prevent attempts by stockholders to replace or remove current management[287](index=287&type=chunk) - The company does not anticipate paying cash dividends, requiring stockholders to rely on stock appreciation for any return on their investment[290](index=290&type=chunk) - The company may be subject to securities litigation due to stock price volatility, which is expensive and could divert management attention[291](index=291&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the 10-Q report, including corporate governance, equity plans, and executive certifications - Exhibits include the Amended and Restated Certificate of Incorporation, By-Laws, an Offer Letter, the 2023 Equity Incentive Plan, and certifications from the President and CEO and Chief Financial Officer[292](index=292&type=chunk) [Signatures](index=53&type=section&id=Signatures) This section contains the official signatures of CymaBay's President and CEO, Sujal Shah, and CFO, Harish Shantharam, certifying the report on August 10, 2023 - The report is signed by Sujal Shah, President and Chief Executive Officer, and Harish Shantharam, Chief Financial Officer, on August 10, 2023[297](index=297&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net loss of $28.8 million for Q1 2023, compared to a net loss of $27.8 million in Q1 2022, translating to losses of $0.29 and $0.32 per share respectively [81] - Cash, cash equivalents, and investments totaled $236.4 million as of March 31, 2023, bolstered by a $34.2 million upfront payment from Kaken and a $92.4 million public equity offering [34] Business Line Data and Key Metrics Changes - Research and development expenses for Q1 2023 were $18.5 million, slightly up from $18.4 million in Q1 2022, primarily due to higher employee compensation offset by lower clinical costs [35] - The company is preparing for the NDA submission following the RESPONSE Phase 3 study results, with a focus on seladelpar for primary biliary cholangitis (PBC) [29] Market Data and Key Metrics Changes - The RESPONSE study is active in over 25 countries with more than 300 participants, indicating a broad international market engagement [10] - The company is collaborating with patient advocacy groups and leading disease experts to enhance treatment for PBC, reflecting a growing market interest in novel therapies [20] Company Strategy and Development Direction - The company aims to transform into a fully integrated commercial biotech company, focusing on the launch of seladelpar for PBC [29] - Strategic initiatives include enhancing commercial infrastructure and preparing for a potential launch in the second half of 2023 [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming RESPONSE study results, which are expected to provide clarity on the drug's efficacy and potential market positioning [20][58] - The management highlighted the importance of addressing patient needs and improving quality of life through innovative treatments for PBC [22][66] Other Important Information - The company has initiated a talent search for key commercial leadership roles to support its launch readiness plans [28] - The company plans to present three accepted abstracts at the EASL Conference, showcasing ongoing research and findings related to seladelpar [37] Q&A Session Summary Question: Can you discuss physician feedback following the Phase 3 ENHANCE results publication? - Management noted a gratifying level of interest and uptake from physicians, driven by the study's unique design and statistical methodology [48] Question: What are the implications of competitor data on pruritus and transaminase levels in PBC? - Management emphasized the importance of liver injury reduction and its relationship to fibrosis, highlighting significant reductions in ALT levels observed in studies [52] Question: What is the timeline for NDA submission following successful RESPONSE results? - Management aims to file as quickly as feasible post top-line data readout, with intentions for rolling submissions in both the US and Europe [58] Question: How does seladelpar compare to other candidates in the clinic regarding pruritus and ALP normalization? - Management indicated that while comparisons are challenging, seladelpar's profile suggests a greater potential for normalization of alkaline phosphatase and significant pruritus relief [73] Question: What are the company's plans for expanding seladelpar into other markets? - The company is evaluating opportunities for either self-distribution or partnerships in other geographies, with a focus on regulatory approval pathways [78]

PART I FINANCIAL INFORMATION This section provides the company's financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the quarter [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) CymaBay Therapeutics reported a net loss of **$28.8 million** for Q1 2023, with cash and equivalents significantly increasing to **$236.4 million** due to a public offering and collaboration payment [Organization and Liquidity](index=8&type=section&id=Organization%20and%20Liquidity) CymaBay, a clinical-stage biopharmaceutical company, focuses on seladelpar for PBC, with an accumulated deficit of **$901.6 million** and sufficient cash to fund operations through Q3 2024 - The company's lead clinical development candidate is **seladelpar**, primarily for the treatment of **primary biliary cholangitis (PBC)**[104](index=104&type=chunk) - As of March 31, 2023, the company had an accumulated deficit of **$901.6 million** and believes its cash, cash equivalents and marketable securities of approximately **$236.4 million** are sufficient to fund its operating plan through the **third quarter of 2024**[52](index=52&type=chunk)[105](index=105&type=chunk) [Collaboration and License Agreement](index=18&type=section&id=Collaboration%20and%20License%20Agreement) In January 2023, CymaBay licensed seladelpar for PBC in Japan to Kaken Pharmaceutical, receiving a **$34.2 million** upfront payment and potential future milestones - Entered into a collaboration and license agreement with **Kaken Pharmaceutical** in January 2023, granting Kaken exclusive rights to develop and commercialize seladelpar for PBC in Japan[152](index=152&type=chunk) - Received an upfront payment of **¥4.5 billion** (approx. **$34.2 million**) and is eligible for up to **¥17.0 billion** (approx. **$128.0 million**) in regulatory and sales milestones[153](index=153&type=chunk) - No revenue was recognized in Q1 2023 as performance obligations, including the transfer of technology and know-how, were not completed, with the upfront payment recorded as **deferred revenue**[5](index=5&type=chunk)[156](index=156&type=chunk) [Development Financing Agreement](index=16&type=section&id=Development%20Financing%20Agreement) The company secured **$75.0 million** from Abingworth for seladelpar development, with repayment obligations up to **3.1x** the funding, recorded as a **$94.6 million** liability - The agreement with Abingworth provided **$75.0 million** in funding for seladelpar development[126](index=126&type=chunk) - Repayment obligations include fixed success payments of **2.0x** funding upon regulatory approval and variable success payments of **1.1x** funding upon reaching sales milestones[39](index=39&type=chunk)[126](index=126&type=chunk) - As of March 31, 2023, the development financing liability was **$94.6 million**, with an imputed interest rate of approximately **19.2%**[72](index=72&type=chunk)[151](index=151&type=chunk) [Stockholders' Equity](index=19&type=section&id=Stockholders%27%20Equity) In January 2023, the company raised **$92.4 million** net from a public offering and established a **$100.0 million** ATM facility in March, with no sales to date - In January 2023, the company raised net proceeds of **$92.4 million** from a public offering of **11.8 million** shares of common stock and pre-funded warrants to purchase **2.1 million** shares[56](index=56&type=chunk)[157](index=157&type=chunk) - In March 2023, the company established an at-the-market (ATM) facility to sell up to **$100.0 million** of common stock, but no shares have been sold under it yet[6](index=6&type=chunk)[161](index=161&type=chunk) Condensed Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Research and development | $18,551 | $18,415 | | General and administrative | $8,324 | $6,087 | | **Total operating expenses** | **$26,875** | **$24,502** | | Loss from operations | ($26,875) | ($24,502) | | **Net loss** | **($28,778)** | **($27,769)** | | Basic and diluted net loss per common share | ($0.29) | ($0.32) | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $59,150 | $20,291 | | Marketable securities | $177,215 | $115,194 | | **Total Assets** | **$245,319** | **$141,852** | | Development financing liability | $94,630 | $90,227 | | Deferred collaboration revenue | $33,733 | $0 | | **Total Liabilities** | **$141,130** | **$105,698** | | Accumulated deficit | ($901,635) | ($872,857) | | **Total stockholders' equity** | **$104,189** | **$36,154** | - The company believes its cash, cash equivalents, and marketable securities of **$236.4 million** as of March 31, 2023, are sufficient to fund its current operating plan for at least **twelve months** from the financial statement issuance date[106](index=106&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses seladelpar's clinical development, including RESPONSE Phase 3 trial completion, and analyzes Q1 2023 financial results, highlighting increased liquidity and operating expenses [Overview](index=22&type=section&id=Overview) The company focuses on seladelpar for PBC, with RESPONSE Phase 3 trial enrollment completed and top-line data expected in Q3 2023, supported by the ongoing ASSURE long-term study - Enrollment of **193 patients** in the RESPONSE Phase 3 registration study for seladelpar in PBC was completed in July 2022[177](index=177&type=chunk) - Top-line data for the RESPONSE study is expected to be released in the **third quarter of 2023**[177](index=177&type=chunk) - The ASSURE trial, an open-label, long-term study, currently has over **200 patients** enrolled and is expected to enroll over **300 patients** to support registration[178](index=178&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2023 total operating expenses increased by **$2.4 million** to **$26.9 million**, driven by higher G&A costs from increased headcount, while R&D expenses remained relatively flat Operating Expenses Comparison | Expense Category | Q1 2023 (in thousands) | Q1 2022 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Research and development | $18,551 | $18,415 | $136 | | General and administrative | $8,324 | $6,087 | $2,237 | | **Total operating expenses** | **$26,875** | **$24,502** | **$2,373** | - Total project costs for R&D decreased by **$2.3 million**, mainly due to the completion of enrollment for the RESPONSE trial and lower drug manufacturing spending for PBC[1](index=1&type=chunk) - Internal R&D costs increased by **$2.4 million**, and G&A expenses increased by **$2.2 million**, both primarily due to higher employee compensation and increased headcount[1](index=1&type=chunk)[54](index=54&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company held **$236.4 million** in cash and equivalents, significantly boosted by a public offering and Kaken collaboration, improving operating cash flow - Cash, cash equivalents, and marketable securities totaled **$236.4 million** at March 31, 2023, compared to **$135.5 million** at December 31, 2022[3](index=3&type=chunk) Net Cash Flow Activity | Activity | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $6,431 | ($25,362) | | Net cash (used in) investing activities | ($60,642) | ($50,990) | | Net cash provided by financing activities | $93,070 | $24,541 | - Net cash from financing activities of **$93.0 million** in Q1 2023 primarily consisted of **$92.4 million** in net proceeds from the January 2023 public equity offering[8](index=8&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the company qualifies as a Smaller Reporting Company - This item is **not applicable** to Smaller Reporting Companies[13](index=13&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2023, the President and CEO and the Vice President, Finance concluded that the company's disclosure controls and procedures were **effective**[14](index=14&type=chunk) - There were **no material changes** in internal control over financial reporting during the quarter ended March 31, 2023[53](index=53&type=chunk) PART II OTHER INFORMATION This section covers legal proceedings, comprehensive risk factors, and a list of exhibits filed with the quarterly report [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company settled a trade secret misappropriation lawsuit filed by Genfit S.A. in February 2023, resulting in dismissal with prejudice and no admission of liability - A complaint filed by Genfit S.A. in January 2021 alleging misappropriation of trade secrets was **settled** on February 21, 2023[23](index=23&type=chunk)[166](index=166&type=chunk) - The action was dismissed with prejudice, the company did not admit to any liability, and the litigation has been **completely resolved**[23](index=23&type=chunk)[166](index=166&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including financial condition, clinical development, reliance on third parties, commercialization challenges, and intellectual property protection [Risks Related to Our Financial Condition and Capital Requirements](index=31&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Capital%20Requirements) The company faces ongoing net losses, requires additional capital, and risks accelerated payments under the Abingworth agreement, with uncertain future revenue generation - The company has incurred **significant net losses** since inception and expects to continue incurring them for the foreseeable future[32](index=32&type=chunk)[35](index=35&type=chunk) - Failure to comply with the Abingworth Development Financing Agreement could lead to accelerated payments, with termination penalties ranging from **100% to 310%** of the funds provided[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - Raising additional capital may cause **dilution** to existing stockholders, restrict operations, or require relinquishing rights to technologies or product candidates[32](index=32&type=chunk)[215](index=215&type=chunk)[341](index=341&type=chunk) [Risks Related to Clinical Development and Regulatory Approval](index=31&type=section&id=Risks%20Related%20to%20Clinical%20Development%20and%20Regulatory%20Approval) Drug development is costly and uncertain, with risks of trial delays, negative results, and regulatory approval failures, exacerbated by geopolitical events affecting trials - Drug development and obtaining regulatory approval is a **costly, time-consuming, and highly uncertain process**[25](index=25&type=chunk) - Clinical trials could be delayed or prevented by numerous factors, including regulatory holds, insufficient enrollment, negative results, or undesirable side effects[217](index=217&type=chunk)[219](index=219&type=chunk) - Due to geo-political turmoil, the company has suspended clinical trial activity in Ukraine and is winding down activities in Russia, potentially complicating data analysis[225](index=225&type=chunk) [Risks Related to Our Reliance on Third Parties](index=32&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) The company relies heavily on third-party manufacturers and contract service providers, posing risks to quality control, supply chain, regulatory compliance, and trial execution - The company relies on **third-party manufacturers** for all drug supplies and is dependent on them for compliance with FDA manufacturing requirements[256](index=256&type=chunk)[260](index=260&type=chunk) - Reliance on limited or single sources for key materials could lead to **significant disruptions**, potentially delaying clinical trials and commercialization[274](index=274&type=chunk)[275](index=275&type=chunk) - The company relies on Contract Service Providers (CSPs) for conducting clinical trials, and their failure to perform can **harm development programs**[263](index=263&type=chunk)[276](index=276&type=chunk) [Risks Related to Commercialization of Our Product Candidates](index=32&type=section&id=Risks%20Related%20to%20Our%20Product%20Candidates) The company lacks commercialization experience, faces market acceptance challenges, intense competition, and uncertainty in obtaining adequate third-party reimbursement for its products - The company has **never successfully commercialized a product** and may be unable to gain sufficient market acceptance if its candidates are approved[28](index=28&type=chunk) - The company currently lacks sales, marketing, and distribution capabilities and may be unable to establish them or enter into effective third-party agreements[279](index=279&type=chunk) - Commercial success is subject to **significant competition** from companies with greater financial, manufacturing, and marketing resources[28](index=28&type=chunk)[267](index=267&type=chunk) [Risks Related to Our Intellectual Property](index=32&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Protecting intellectual property is uncertain, with risks of patent invalidation, infringement claims, and potential loss of key licenses, such as for seladelpar from Janssen NV - The company relies on patents, trade secrets, and confidentiality agreements, but cannot guarantee that its patent applications will issue or provide **adequate protection**[284](index=284&type=chunk) - The company faces risks of **infringement claims** from third parties, which could block product commercialization or result in substantial damages and litigation costs[285](index=285&type=chunk)[316](index=316&type=chunk) - The company licenses key intellectual property for seladelpar from Janssen NV, and **termination of this license** would materially adversely affect the business[317](index=317&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, key agreements, and required certifications List of Exhibits | Exhibit No. | Description | | :--- | :--- | | 3.1, 3.2, 3.3 | Certificate of Incorporation and By-Laws | | 10.1 | Transition Agreement with Dennis Kim | | 10.2 | Collaboration and License Agreement with Kaken Pharmaceutical Co., Ltd. | | 31.1, 31.2 | CEO and CFO Certifications (Rule 13a-14(a)) | | 32.1 | CEO and CFO Certifications (Sarbanes-Oxley Act of 2002) | | 101, 104 | Inline XBRL Documents |

Financial Performance - As of December 31, 2022, the company has an accumulated deficit of $872.9 million, primarily due to research and development expenses, general and administrative expenses, and net interest expenses [323]. - Total operating expenses for the year ended December 31, 2022, were $93.1 million, an increase of $5.5 million compared to $87.6 million in 2021 [324]. - The net loss for the year ended December 31, 2022, was $106.0 million, compared to a net loss of $90.0 million in 2021, representing an increase in loss of $16.0 million [324]. - The company expects to continue incurring substantial losses from operations for the foreseeable future, with no assurance of generating sufficient revenue to achieve profitability [323]. - As of December 31, 2022, the company had cash, cash equivalents, and marketable securities totaling $135.5 million, down from $194.6 million at the end of 2021 [334]. Research and Development - Research and development expenses for 2022 were $68.0 million, up from $64.5 million in 2021, reflecting an increase of $3.5 million [324]. - Research and development expenses increased by $3.5 million to $68.0 million in 2022 from $64.5 million in 2021, with expectations for further increases due to ongoing late-stage development of seladelpar in PBC [325]. - Internal research and development costs rose by $5.6 million to $26.4 million in 2022 from $20.8 million in 2021, driven by an increase in headcount for clinical studies [328]. - The RESPONSE trial for seladelpar, a treatment for primary biliary cholangitis, completed enrollment of 193 patients, with top-line data expected in Q3 2023 [303]. - The ASSURE trial is actively enrolling patients, with over 200 subjects currently enrolled and an expected total enrollment of over 300 patients [304]. - The company retains full commercial rights to MBX-2982, which is being evaluated in a Phase 2a study for Type 1 Diabetes, with potential applications in inflammatory diseases [306]. Expenses and Costs - General and administrative expenses rose to $25.1 million in 2022 from $23.0 million in 2021, an increase of $2.1 million [324]. - General and administrative expenses increased by $2.1 million to $25.1 million in 2022 from $23.0 million in 2021, primarily due to increased headcount in administrative personnel [329]. - Interest expense, net increased by $10.5 million to $12.9 million in 2022 from $2.4 million in 2021, mainly due to additional proceeds from the Financing Agreement and full-year interest accrual in 2022 [331]. - Total project costs decreased by $2.1 million to $41.6 million in 2022 from $43.7 million in 2021, primarily due to the completion of enrollment in the RESPONSE trial and lower spending in other clinical studies [328]. Future Outlook and Agreements - The company has significant potential payment obligations under the Financing Agreement, including fixed and variable success payments contingent upon regulatory approval and sales milestones for seladelpar [349]. - The company received ¥4.5 billion ($34.2 million) from Kaken Pharmaceutical in January 2023 as part of a Collaboration and License Agreement for seladelpar commercialization in Japan [337]. - The company sold 11,821,428 shares of common stock at $7.00 per share in January 2023, raising approximately $97.7 million in gross proceeds [338]. - The accumulated deficit reached $872.9 million as of December 31, 2022, with expectations to incur substantial expenses related to ongoing development activities [344]. COVID-19 Impact - The company has not experienced adverse impacts on financial reporting due to COVID-19, but future disruptions remain uncertain [308].

CymaBay Therapeutics, Inc. (NASDAQ:CBAY) Q4 2022 Earnings Conference Call March 16, 2023 4:30 PM ET Â Company Participants Paul Quinlan - General Counsel Sujal Shah - Chief Executive Officer Chuck McWherter - President, Research & Development and Chief Scientific Officer Lewis Stuart - Chief Commercial Officer Dan Menold - Vice President, Finance Conference Call Participants Yasmeen Rahimi - Piper Sandler Steven Seedhouse - Raymond James Kristen Kluska - Cantor Fitzgerald Ed Arce - H.C. Wainwright Jay Olson ...